Amazon May Hike Prime Subscription As Much As 50 Percent

When Amazon announced their earnings numbers on Thursday, it was the expected mix of expanded revenue and very little profit.

One part of their business that garnered a lot of attention is their $79 a year Prime shipping program, which offers free shipping as well as access to the Prime Instant Video streaming TV and movie catalog.

It's difficult to know precisely how much money Amazon loses on its Prime service, though the best estimate seems to be in the range of $1 billion to $2 billion a year. The company doesn't even release its subscription figures, though it claimed in a press release accompanying the earnings numbers that the number of subscribers continues to grow:

"Amazon announced a record-setting holiday season for Amazon Prime, the annual membership program with tens of millions of members worldwide. Amazon is working hard to increase capacity for the Prime program. In December, Prime was so popular that Amazon limited new Prime membership signups during peak periods. Prime Instant Video selection increased from 33,000 to more than 40,000 movies and TV episodes in 2013."

But in the earnings conference call with investors and the press on Thursday, Thomas J. Szkutak, Amazon’s chief financial officer, said the company is seriously considering a price increase for Prime, the first in the program's nine years.

"Shipping costs have gone up a lot, fuel costs have gone up a lot," he said. He declined to give much info about the proposed price increase, other than to speculate that if it happened, it would be in the range of $20-$40. He also neglected to mention the increased cost of content for Prime Instant Video, which includes an aggressive slate of original programs.