Seattle, WA – Amazon announced on Friday, September 22nd, 2023 that it will introduce advertising on its Prime Video streaming platform beginning early next year. The ad-supported option will allow Amazon to generate additional revenue from its video content while giving Prime subscribers a less expensive alternative to the ad-free tier.
The new ad-supported option will debut first for Prime members in the United States, followed by the United Kingdom, Germany, France, Italy, Spain and other markets later in 2024.
In a statement, Amazon said the ad-supported service will provide “a great customer experience” with “relevant advertising.” The e-commerce giant noted that it would limit the number of ads to an average of 4 minutes of commercials per hour, considerably less than traditional broadcast and cable TV.
The ad-supported Prime Video tier will be offered to subscribers at the current Prime price. Those wishing to continue watching ad-free will pay an additional $2.99 per month in the U.S., on top of the standard $14.99 monthly or $139 annual Prime membership fee.
Industry experts say Amazon’s move represents a bid to capture a share of the over $1 billion advertisers now spend annually on streaming TV commercials on services like Peacock, Hulu and Paramount+. The launch of an ad-supported option also reflects the sharply higher costs Amazon faces to acquire and produce the original movies and shows exclusive to Prime Video.
As competition intensifies in the streaming space, an ad-supported choice gives budget-conscious consumers a lower cost access point to popular Prime Originals like “The Lord of the Rings: The Rings of Power,” “The Boys,” and “Thursday Night Football.” It also provides Amazon opportunities to generate revenue from its large subscriber base.
But some analysts caution there are risks, observing that advertisements could degrade the viewing experience and that competitors like Netflix and Disney+ have so far chosen not to include commercials. Amazon will need to demonstrate that it can integrate advertising while maintaining Prime Video’s utility and quality.
