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Prime Video Price Hike: Now $139 a Year After Massive Growth Fueled by NFL Livestreams

Amazon's $20 per year increase is possible because it has something Netflix and Disney+ don't have: live sports.

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Weeks after Netflix raised its subscription prices, Amazon is set to follow suit. The e-commerce giant released its Q4 earnings report today, seeing $137.4 billion in quarterly revenue. That marks a significant improvement from the $125.6 billion it generated in Q4 of 2020. Profits increased to $14.3 billion, almost doubling from $7.2 billion a year ago. There was even more good news for Amazon investors, if not customers, as the company announced that it will raise Amazon Prime subscription prices for the first time since 2018.

Prime subscriptions will now cost $139 annually, up from $119, or $14.99 monthly, up from $12.99. The 17 percent increase comes as Amazon continues to battle with the likes of Netflix, Disney, Universal, and Paramount to be viewers’ streaming service of choice. The price increase reflects Amazon’s confidence that their original programming and increased investment in sports coverage can give them a leg up over competition, even at higher prices.

As the so-called “Streaming Wars” wage on, the one thing keeping traditional cable services afloat has been live sports. The presence of ESPN allowed cable providers to charge massive premiums for years, as live sporting events is one of the main drivers of cable subscriptions. So far, Netflix has made no forays into live sports programming. Disney has been trying to drive Disney+ subscriptions by bundling the service with Hulu and ESPN+. But Amazon has access to the crown jewel of sports broadcasting: live NFL games.

Amazon recently signed an 11-year deal to stream NFL games on Prime. And while they have dipped their toe into streaming occasional games during the last several seasons, 2022 will see Amazon having a much more serious presence in the NFL. Amazon Prime will become the exclusive home of the league’s “Thursday Night Football” games, which is expected to drive significant traffic to the service. Amazon is expected to pay over $1 billion per year for the rights, and the company is looking to maximize its return on that investment by raising prices.

In addition to their NFL coverage, Amazon plans to triple the amount of original shows and movies that debut on the streaming service. The company hopes that high profile series, including the upcoming “Lord of the Rings” adaptation, will satisfy fans who do not watch football.

In after hours trading, Amazon stock rose 15 percent upon the announcement.

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