Updated from 8:42 a.m. to include thoughts from analyst in the third paragraph.
NEW YORK (TheStreet) -- Despite massive objections around the world, Amazon (AMZN) has raised the price of its Prime service to $99 from $79, but offered users a chance to lock in the lower rate for the next seven days.
On its Web site, Amazon announced it was raising the price of Prime, "[f]or the first time since it was introduced nine years ago, the price of Prime is going up." When existing Prime members have their subscriptions run out, they will pay $99, while Amazon Student members will pay $49. However, if customers sign up for Prime within the next seven days they can lock in the lower rate of $79 for the first year.
Following the announcement, Cowen analyst John Blackledge said it could generate an additional $460 million in revenue for the company, as the company continues to add subscribers. "Purchases are habitual and are not impacted by seasonality for Prime members at this point."
Some have considered the move controversial, suggesting that raising the price of Prime 25% will cause mass defections to other services, including Netflix (NFLX), which competes with Prime from a content perspective. Amazon Prime also offers users free, two-day shipping on goods ordered from Amazon's Web site.
TheStreet conducted a survey earlier this year, when the company announced it was first considering raising the price of the service. Of the more than 1,000 people surveyed between Jan. 31, 2014 and Feb. 2, 2014, 70.1% of respondents said "no" when asked if they thought the service was worth having at a higher price, regardless of whether they currently use it or not. Just 13% of the sampling subscribed to Prime.