Amazon Prime Video is preparing to integrate ads into its platform, offering subscribers the option to pay a premium for an ad-free experience.
Amazon plans to incorporate advertisements into its Prime Video platform to finance further TV and movie productions in 2024. This development will initially affect UK, US, Germany, and Canada Prime users.
However, for an additional fee, viewers can opt for an ad-free experience. Amazon emphasizes that the Prime Video platform remains a great deal for subscribers. This movie parallels the choices made by competitor platforms like Disney+ and Netflix.
Amazon has plans to extend this advertising feature to countries including France, Italy, Spain, Mexico, and Australia within the same year. An ad-free version of Prime Video will be available in the US for $2.99 (£2.44) monthly. Pricing details for other countries are yet to be disclosed.
UK residents pay £8.99 monthly or £95 annually for Prime, which provides free one-day delivery and streaming services. Amazon revealed that from 2024, limited ads would accompany Prime Video content in the UK.
While this shift aligns with trends seen from other streaming giants, it has yet to be well-received by all consumers. For instance, Disney+ rolled out its ad-supported version to the UK this past August, and Netflix launched its “basic with ads” package the prior year, diverging from its pioneering ad-free model.
Hanna Kahlert, an analyst from Midia Research, notes that many consumers are averse to ads on platforms they’re paying for. However, Amazon’s diverse Prime offerings likely shield it from significant subscription losses. She mentions that Amazon’s service range gives it a competitive edge, making content an added benefit rather than the sole attraction.
Amazon committed to featuring significantly fewer ads than traditional TV and other streaming platforms. They intend to guide Prime members on opting for the ad-free version before its introduction. Live broadcasts, such as sports events, will retain advertisements even with the ad-free subscription.
Recent data from Kantar highlighted a drop in paid video streaming services, with a decrease of two million subscribers in the UK last year. Despite a surge during the holiday season, the numbers dwindled shortly after.
Max Willens, an analyst at Insider Intelligence, commented on Amazon’s decision, indicating that while ad-supported tiers are commonplace, it’s atypical for Amazon to alter a customer-centric service, especially one whose cost has surged since its inception.
The company’s recent financial reports indicate robust growth, wrapping up the second quarter with a whopping 238 million subscribers and registering profits of $1.5 billion. The Q2 2023 results showcased an impressive addition of approximately 6 million subscribers.
Notably, in May, Netflix enforced password-sharing restrictions across the US, the UK, and over a hundred others. This move has significantly contributed to the surge in new subscriptions during that quarter.
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
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