Ad-supported subscription tiers are quickly becoming commonplace in the streaming world. Netflix and Disney+ have most recently embraced the advertising model as a cheaper option amid a slowdown in new signups as more customers want to cut expensive streaming costs out of their budget. Now, Prime Video is about to launch its ads as the Wall Street Journal reported that Amazon is in the early stages of planning an ad tier for its platform. Internal sources say discussions have been ongoing over the past few weeks.
With the new tier, Prime Video looks to capitalize on its strong position in terms of ad revenue. Amazon made $9.5 billion in the first quarter and is third in the ad revenue pond, behind only tech giants Meta and Google. Advertisers obviously want their ads to appear before the content offered on the streamer, for example The Wonderful Mrs Maisel and his extensive film catalog, leaving a lot of money on the table to help cover the cost of his original programs and films. The company is also looking to expand its offerings further, with an NBA deal not unlike what it signed with the NFL for Thursday night’s football games, which could make the promotional level possible. Basically, however, the CEO Andy Jassi wants to make Amazon’s streaming division profitable after Jeff Bezosa reign that sought solely to expand through expensive, high-profile series such as The Lord of the Rings: Rings of Power.
The model for what this level might look like has not yet been determined, but there is a chance it will come at a high cost to current subscribers. While a cheaper ad tier is one option, Amazon is also considering building a more expensive ad-free tier while rolling out more ads at short breaks to all current subscribers, whether through an Amazon Prime account which currently costs $14. $.99 per month, or a standalone Prime Video subscription, which currently costs $8.99 per month. As the Wall Street Journal points out, this would not be out of character for Amazon, as it used a model similar to its music offering, which limited on-demand listening to more expensive subscriptions. The possibility of neither plan coming to fruition also still exists, but that seems unlikely given everything the streamer has planned.
Ad-supported content is nothing new for Amazon in the streaming space. The push for live sports is also driven in part by the advertising revenue that comes from owning the rights to NFL and NBA games. There is also an ad-supported streaming service, Freevee, which is also operated by the company. Amazon has made every effort to make the free service more attractive over time, developing new series for its catalog and putting originals such as Wheel of Time And Reacher on the platform to get more attention.
Prime Video Considers Adding Ad-supported Max and Paramount+ Channels
In addition to potentially adding ads of its own, Amazon is also exploring adding ad-supported versions of its rivals Paramount+ and the newly minted Max to Prime Video channels. Last year, HBO Max became available as a service channel through which users could sign up, but only for the ad-free plan. However, if discussions with Warner Bros. Discovery and Paramount will prove fruitful, users will now be able to use cheaper data plans through Prime Video instead of accessing other streamers directly.
Stay tuned here on Collider to learn more about the future of Prime Video as it plans to further implement ads. Check out the newly released trailer for the second season of the hit service. good omens below.
Source: Collider
I have worked as a journalist for over 7 years and have written for many different publications. I currently work as an author at Daily News Hack, where I mostly cover entertainment news. I have a great deal of experience in the industry and am always looking to learn more. I am a highly motivated individual who is always looking to improve my skills. I am also a very friendly and personable person, which makes me easy to work with.
