Amazon is rising after hiking the price of a monthly Prime membership

David Ryder/Getty Images
  • Amazon‘s stock price rose on Friday after it announced it was increasing its monthly subscription fees.
  • Amazon Prime memberships are a crucial part of the company’s ecommerce empire because they represent loyal customers who spend the most on its platforms.
  • You can view Amazon’s real-time stock price here.

Shares of Amazon rose on Friday after the company announced it was increasing the prices on its monthly subscriptions.

The company said it will raise the fees on its monthly Amazon Prime membership in the US to $US12.99, an 18% increase from $US10.99, according to Recode. Under the new pricing plan, customers will pay roughly $US156 a year.

Amazon Prime’s annual membership fee of $US99 will not change.

The company initially launched the monthly plan less than two years ago to attract lower-income customers who could not afford the annual membership fee or who did not want to use it continuously.

Subspcriptions are a big part of Amazon’s business, representing the company’s most loyal customers – who are often the most frequent spenders – and roughly $US2.5 billion in revenue, according to its third-quarter financial statements. Though Prime represents the bulk of its subscription profits, the number also includes its audiobook, e-book, digital video, digital music, and non-Amazon Web Service subscription services.

Amazon’s stock is trading up 0.85% at $US1,304.34 a share. It is up 10.25% for the year.

Amazon is expected to report earnings on Feb. 1.

Read more about how how the tech giant could surprise investors in 2018.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.