The online retail giant revealed it is raising the price of an annual subscription to Prime from $79 to $99. The price for the student version of Prime will also rise to $49.
Amazon Prime is an annual subscription service that offers free two-day shipping on select items, access to a host of free videos through the streaming service Amazon Instant Video and access to the Kindle Owners' Lending Library used to borrow books.
Shares of Amazon are up more than 2% in early trading following news of the price increase.
The price increase was first reported by Cnet.
Amazon first hinted at a price increase for Prime in January during its fourth-quarter earnings call, when the company also revealed its shipping costs surged 19% to $1.21 billion.
"They're getting caught in the cost of getting it to you in 48 hours," says Gartner analyst Gene Alvarez.
Last month, a survey from Bizrate Insights conducted after Amazon's quarterly call found many Prime users would consider cancelling their subscription if the price was raised.
However, based on initial sentiments from readers on Twitter, it appears many will hang on to their Prime membership:
@usatodaytech $99/yr for streaming movies/TV shows, Kindle Borrowing Library, %26 free 2-Day shipping is still a monster deal. I'm keeping it.
— Joe Casabona (@jcasabona) March 13, 2014@usatodaytech@USATODAY keep it. Not too happy with paying more but Amazon's customer service ROCKS and that makes me happy customer.
— Cynthia Lea (@cynsmith1972) March 13, 2014Follow Brett Molina on Twitter: @bam923.
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