September 22, 2023
Amazon Prime Video plans to introduce commercial breaks to its popular streaming service early next year, following top platforms such as Disney+, Netflix and Warner Bros. Discovery’s Max, which already offer ad-supported tiers. The company indicates it will run fewer ads than traditional linear TV broadcasters and broadband rivals but has yet to specify numbers. Subscribers in the U.S. who want to keep the streaming service ad-free have the option of paying an additional $2.99 per month. Amazon explained that its strategy to include ads would help it “continue investing in compelling content and keep increasing that investment over a long period of time.”
Amazon purchased MGM Studios two years ago for $8.5 billion and is currently paying millions for the rights to stream “Thursday Night Football.” While streaming increases in popularity, companies are scrambling to offer new content.
Companies are turning to ads to help counter the costs of content and infrastructure, especially as subscriber numbers are leveling off in many regions. “Most major streaming services have started to introduce ad tiers as a way of luring subscribers as the market becomes more saturated,” explains Axios.
According to Variety, “the world of streaming may … eventually mirror the world of traditional television in the not-too-distant future.”
Amazon already runs ads on its Freevee service (that does not require a subscription) and its weekly stream of “Thursday Night Football.” “It has also introduced new commercial formats in such areas as its Amazon Fire broadband service,” notes Variety. “Some ads pair sponsors with movie recommendations, and others allow subscribers to make quick e-commerce purchases.”
“Advertising across Prime Video content will be introduced in the U.S., UK, Germany and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year,” reports Financial Times.
Access to Prime Video is one of the features available to Amazon Prime members who pay $14.99 per month, while the video service is also offered as a standalone for $8.99 per month.
“We will email Prime members several weeks before ads are introduced into Prime Video with information on how to sign up for the ad-free option if they would like,” explains Amazon in a blog post.