Amazon in talks to introduce Ad-Supported Tier for Prime Video streaming
Amazon is currently in discussions to introduce an advertising-supported tier for its Prime Video streaming service, according to According to Wall Street Journal sources. The move comes as Amazon aims to bolster its ad business and generate more revenue from its entertainment division. Advertisers are eager for Amazon to follow in the footsteps of platforms like Netflix and Disney+, which have already introduced similar ad tiers. It is worth noting that Prime Video is one of the most popular alternatives among users in the market now since Netflix implemented its global policy on password sharing.
Prime Video, available through Amazon's Prime membership or as a standalone service, features a wide range of original shows such as "The Boys" and offers a library of movies and live sports, including NFL's "Thursday Night Football" games. Amazon has already started incorporating more ad-supported programming into Prime Video, including sports coverage with ads and product-placement advertising in some shows. The company also provides content from Amazon Freevee, its free ad-supported video service. In addition to creating an ad-supported tier for Prime Video, Amazon is in discussions with Warner Bros. Discovery and Paramount Global to add ad-based tiers of their streaming services through Prime Video Channels.
The potential options for introducing ads in Prime Video include a new ad-powered plan below $9, taking inspiration from Netflix's pricing strategy, offering it at $6 per month. The second option involves adding advertisements to existing Prime Video subscriptions while introducing a new ad-free plan at a higher cost, providing viewers with the choice between a lower-priced ad-supported experience or a premium ad-free experience with additional features. These strategies aim to cater to diverse user preferences and potentially drive increased revenue for Amazon's popular streaming service. The implementation of the ad tier could involve short ad breaks to accommodate the advertisements. By introducing the ad-supported tier, Amazon aims to cover the costs of producing its shows and movies, aligning with CEO Andy Jassy's focus on profitability across different business divisions.
