Amazon is to raise the price of its Prime service for UK customers due to higher operating costs.
From September, monthly subscriptions will go up £1 to £8.99 and annual membership will rise from £79 to £95.
Amazon said the price rise, its first in the UK since 2014, was partly due to inflation, which is at a 40-year high.
Other services such as Netflix have also increased subscription prices, despite signs people are beginning to cut back on streaming services.
However, Amazon Prime offers more than just its streaming service. Prime also offer unlimited deliveries of products.
Amazon said the new pricing would begin from September, or at the customer’s next membership renewal date, adding that switching to an annual plan or cancellation of membership was also an option.
The move comes at a time when many households are looking to cut back on spending, with prices of goods rising at the fastest pace for 40 years.
Retail analyst Natalie Berg, who has written a book about how Amazon will shape the future of shopping, said the Prime price hike was “not really a surprise” after Amazon put up its prices for Prime in the US in February.
“It is an incredibly bold move to increase fees smack in the middle of the worst cost-of-living crisis in a generation, but Amazon is indispensable to many shoppers and they [the company] know that,” she told the BBC.
“Amazon has become so deeply embedded in our daily lives that so many people will accept the hike.”
Earlier this year, a BBC-commissioned survey found people struggling with soaring energy bills and fuel prices were cutting back on food and car journeys to save money. More than half (56%) the 4,011 people asked had bought fewer groceries, and the same proportion had skipped meals.
Recent research has suggested that more people are cancelling video streaming subscriptions, such as Netflix, Disney+ and Amazon Prime, due to the rising cost of living.
A total of 1.66 million services were dropped in the second quarter of 2022, market research firm Kantar said, with the under-24s age group most likely to cancel.
More than a third of cancellations were attributed to cutting costs, with the primary reason as “wanting to save money”.
Can I save money on my subscription?
It might only be an extra pound a month, but with everyone looking to tighten their budgets at the moment every pound counts, so here’s a few ideas on how to beat the rise.
Most people pay monthly for Amazon Prime, which means the price rise will kick in from mid-September. But if you’ve got the cash handy then you can save by paying for a full year’s subscription upfront before that point. That will lock you in at the lower price until 2023, and save you about £30.
It’s worth checking if you’re signed up to Prime even if you think you’re not, because it’s easy to click ‘join’ by mistake when making a purchase and get rolled into membership without realising.
Take a long hard look at your subscriptions. There’s no charge to cancel your monthly Prime membership and, after a lot of pressure, Amazon have made it easier to find and click through to that cancellation process. They should even refund you if you’ve only just paid for that month. If you decide to sign up again later you might even be able to get one month free when re-joining, which would save you that £8.99.
If you’ve a few different TV subscriptions, it’s worth thinking about rotating. Maybe your Christmas fix is on one provider but your summer love is with another – switch them so you’re only paying for one at a time. Binge-watch, then cancel your membership, and switch to another service rather than paying for each of them all year-round.
High competition in the streaming industry has led to competitive pricing and offers for customers.
But Netflix increased the price of its plans in 2021 and 2022. It recently announced it had lost almost a million subscribers between April and July, and it has now lost members for two quarters in a row.
However, Ms Berg added Amazon Prime could not be directly compared to Netflix and other streaming platforms due to brand’s main service being free shipping for products.
“Amazon has got a lot more stickiness because of the shopping element,” she said.
Amazon said it had invested billions of pounds in streaming content in recent years, with original series such as The Terminal List, as well as Clarkson’s Farm.
It has also moved into sports broadcasting, after successfully bidding for the rights to screen Tuesday night Champions League football matches from 2024.
Amazon already has the exclusive rights to 20 Premier League matches a season, including the entire round of matches on and around Boxing Day each year. And it has a five-year deal to exclusively broadcast the US Open tennis tournament in the UK.