Amazon is raising Prime membership prices for the first time in four years

Amazon had a good quarter, but costs are rising, so it's raising prices too.

What you need to know

• Amazon released its Q4 2021 financial earnings with a 9% year-over-year increase in revenue.
• Amazon announced that it is raising its yearly prime subscription by $20 to offset growing costs.
• Amazon Web Services (AWS) revenue rose 40% despite recent outages.

Amazon's Q4 2021 financial earnings were released on Thursday, reporting $137 billion in revenue - a 9% increase year-over-year. It is also a notable increase over the previous quarter's $110 billion, likely due to holiday shopping, particularly over the Black Friday and Cyber Monday weekend. That said, Amazon CEO Andy Jazzy highlights ongoing difficulties due to the pandemic.

"As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron," Jassy says in a statement. "Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic."

Notably, Amazon Web Services (AWS) saw a 40% increase in revenue amid recent outages. The company also reported its advirtising revenue for the first time, which raked in nearly $10 billion in Q4, showing healthy growth while still trailing Google and Meta.

Amazon also announced that it is raising the price of its Prime membership for the first time since 2018. Starting February 18, the monthly cost will rise from $12.99 to $14.99, while the yearly subscription will increase by $20 to $139 per year. Current subscribers will see the rise in price on March 25 "on the date of the next renewal."

Amazon says this results from higher wages, transportation costs, and expanded Prime benefits, particularly as the company gears up for its long-awaited "Lord of the Rings: The Rings of Power" series to begin streaming this September. The company also continues to build on its entertainment offerings with recent improvements to the best Fire TV sticks and more.

That said, the price increase will only affect subscribers in the U.S., as Amazon CFO Brian Olsavsky notes that the company evaluates countries differently.

"We look at the relative price of the customer versus our cost to supply that and usage and the value that we're creating for customers," Olsavsky said during the earnings call. "[We] felt, especially after not raising the price in the United States since 2018, that the time was right to raise it and we think it's a much more valuable program today than it was 2020, let alone 2018. So other countries will continue to evaluate every year."