Amazon is reportedly planning to be an ad-supported tier ahead Prime video streaming service. According to a report from WSJ, discussions around advertising levels are still in the “early stages”. With a level of advertising in its subscriptions, the company will join the bandwagon of similar subscriptions offered by rival platforms Netflix and disney.
According to the report, Amazon has Warner Bros. Discovery and Paramount Global to provide ad-based tiers of third-party streaming services such as Max and Paramount+ through its Prime video channels. It is important to note that sports coverage on the platform, such as NBA and Thursday Night Football in the US, already comes with advertisements.
What it can mean for users
The report notes that the e-commerce giant is considering multiple ways to introduce ads. This includes showing more ads to existing Prime subscribers and even offering an “option to pay more for an ad-free alternative and other features.”
The report states that the commercial breaks will be “short”, but goes no further in explaining how they will be shown compared to other streaming platforms.
Last month, Amazon India increased the price of the monthly subscription by Rs 120. The monthly subscription, which previously cost Rs 179, now costs Rs 299. Meanwhile, the Rs 459 quarterly subscription now costs Rs 599. However, the annual subscription price remains unchanged.
Ad-based levels on streaming platforms
After being strictly against advertising, Netflix launched a cheaper plan with ads in 2022. Disney+ followed suit and began offering a plan with advertising. This platform also increased the price of its standard ad-free tier.
As subscribers grapple with high inflation and interest rates, the streaming industry is facing a slowdown in new signups. The global economic downturn has forced consumers to monitor entertainment spending and other discretionary spending.
Amazon’s recent earnings report shows that the company has seen revenue growth of $9.5 billion. The company, along with other tech majors, has deployed layoffs and other cost-cutting measures to cope with the uncertain economic conditions. The ad-supported tier is expected to help Amazon generate more revenue.
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