Amazon Prime Fee Hike--Good for the Stock? - Real Time Insight


This morning Amazon announced an increase in its prime membership annual fee to $99 from $79 ($49 from $39 for students). This is the first increase in nine year since the service was launched.

Prime service that provides two-day free shipping, video streaming and access to the kindle library, is hugely popular. While the company has not disclosed the number of prime subscribers, analysts expect that the online retail giant has 20 to 25 million prime members in the US. So, the increase could beef up the annual revenues by about $300 to $400 million.

During the recent earnings conference call, the management said that shipping costs had gone up and the customer usage of the service had increased in the past nine years.

Further, they have added a lot of new services to the membership including online video streaming and the kindle library. Also, there are reports that Amazon is planning to sweeten the deal by adding extra services to prime.

As a prime subscriber, I think that the service is definitely worth $99 per year; but what about the stock? 

Do you think the move will be positive for the stock?

AMAZON.COM INC (AMZN): Free Stock Analysis Report

MKT VEC-RETAIL (RTH): ETF Research Reports

VIPERS-CONS DIS (VCR): ETF Research Reports

SPDR-CONS DISCR (XLY): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: AMZN , RTH , VCR , XLY

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