Will Amazon Prime At $99 Really Scare Anyone Off?

Amazon is hiking its Prime service fee to $99 due to increasing transportation and shipping costs. Prime users enjoy free two-day shipping.

Will Amazon Prime At $99 Really Scare Anyone Off?
Flickr / magerleagues

Amazon Prime members will soon see an increase in the annual fee to use its service. 

Amazon announced the hike on its website Thursday — the fee for existing Prime members will increase $20 to $99, with the fee for student members increasing to $49.

This will mark the first time the retail giant has ever increased the price of Prime since its launch in 2005 — giving users free two-day shipping, unlimited streaming to more than 40,000 videos, and the ability to borrow books for Kindles. (Via ABC)

The fee hike is still $20 less than what the online retailer previously considered last month to help cover more expensive shipping and transportation costs. (Via The Wall Street Journal)

But with Amazon Prime's increasing popularity, members probably won't complain about the new prices. 

As one business analyst puts it to The Seattle Times, "A price increase would affect the rate at which Amazon Prime membership grows, but probably would not result in an actual decline in Prime members."

And Businessweek reports with all the perks Prime has to offer — with streaming music in the works — its monthly cost will sit at about $8, still a cheaper bargain than even some Netflix plans that only offer video services.

The move comes just days after a lawsuit claiming the company is duping its Prime users about its free-shipping perks.

According to ABC, the suit alleges the so-called "free shipping" advertised to Prime members is not really free, and the company actually encourages sellers to inflate prices to Prime users to cover the shipping costs.

The Prime fee hikes will apply to any service renewals and signups starting April 17.