Another previously ad-free streaming service is adding commercials to its programming.
Amazon announced Friday morning that its Prime Video service will have limited ads starting in early 2024 (an exact date for the rollout has yet to be determined). Additionally, the ad tier will be the default option for Prime Video, which is included in an Amazon Prime membership, along with free package shipping, Amazon Music, and other benefits. The company says the price of a regular Prime subscription won’t increase next year, but users who want to continue watching Prime Video without ads will have to pay an extra $2.99 per month. Amazon will alert users a few weeks before the introduction of ads on Prime Video with instructions on how to sign up for ad-free viewing.
Prime Video joins the previously commercial-free services Netflix, Disney+ and Warner Bros. Discovery’s Max in looking for the revenue stream that advertising can bring on top of subscription costs (Hulu, Peacock and Paramount+ have had ad-supported plans from the start). Amazon also has the free, ad-supported streamer Freevee, which isn’t affected by the Prime Video change.
Amazon says the inclusion of ads — it promises “significantly fewer” commercials than linear TV — on Prime Video will help the streamer continue to invest in long-term programming, including original series and live sports like the NFL. Thursday night football franchise, whose rights amount to $1 billion annually.
While ad-supported tiers for SVOD services typically have lower monthly prices (or no additional fees in the case of Prime Video), the dual revenue streams can actually make the cheaper offering more lucrative. “Consumers don’t just tolerate advertising in video content; in most cases they even see benefits,” says Mark Loughney, senior consultant at Hub Research. The Hollywood Reporter in August. “It allows them to choose their preferred video levels at a lower cost, and when presented well, advertising results in a more engaging viewing experience.”
Prime Video programming ads will roll out in early 2024 in the United States, United Kingdom, Germany and Canada. Users in France, Italy, Spain, Mexico and Australia will start seeing ads later this year.