Amazon to Introduce Ads on Prime Video, Following in the Footsteps of Competitors
Amazon has recently announced that it will be incorporating ads into its Prime Video service, joining other streaming platforms such as Netflix and HBO Max, which have already implemented ad-supported subscription tiers. The move comes as streaming companies seek additional revenue streams.
Starting next year, shows and movies available on Prime Video will include limited advertisements. Amazon stated that the introduction of ads will enable them to “continue to invest in engaging content and increase that investment over a long period of time.” Investments in content have already soared by almost 30% in 2022, amounting to $16.6 billion. However, the company did not disclose the duration of the ad breaks, emphasizing that there will be significantly fewer ads compared to traditional television and other streaming providers.
Customers who prefer an ad-free experience will have the option to purchase an ad-free tier for an additional $2.99 per month. Prime Video, known for popular shows like “The Marvelous Mrs. Maisel” and “Citadel,” is currently included in the $139 annual Prime subscription.
Streaming services are no longer solely focused on acquiring subscribers but are now under pressure from investors to generate profits from their existing user base, even if it means sacrificing subscriptions. To achieve this, platforms have resorted to selling advertisements or increasing monthly subscription fees.
Last month, Disney+ raised its prices for the second time in less than a year. In October, the monthly cost of its ad-free plan increased by $3, amounting to $13.99. Hulu, in which Disney holds a majority stake, will also be raising its monthly ad-free subscription by $3 to $17.99. Similarly, in July, NBCUniversal-owned streaming platform Peacock increased its prices for the first time.
As the streaming industry evolves, companies are exploring various avenues to sustain their growth and profitability. The introduction of ads on Prime Video represents Amazon’s strategic move to align with industry trends and capitalize on the demand for compelling content while simultaneously satisfying investors and maintaining a competitive edge in the market.