Amazon Prime Video set to introduce new ads

By Anietie Udoh
Amazon has confirmed its plan to introduce advertisements on Prime Video, marking a significant shift in its subscription strategy. Starting from January 29, limited ads will be integrated into movies and TV shows, according to an email sent to customers.
The move is a strategic effort by Amazon to sustain investments in compelling content and ensure a gradual increase in such investments over an extended period. Amazon emphasized its commitment to maintaining significantly fewer ads compared to traditional TV and other streaming providers.
In the email, Amazon stated, “This will allow us to continue investing in compelling content and keep increasing that investment over a long period of time. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers.”
The decision aligns with the broader industry trend of streaming services adopting tiered subscription models. Disney+, Netflix, Hulu, and Peacock have already embraced ad-supported subscription options alongside pricier ad-free alternatives.
Amazon initially announced the introduction of the ad-supported tier in September, responding to the evolving landscape of the streaming wars.
According to the U.S. Chamber of Commerce, the tiered subscription model adopted by streaming services aims to boost revenue by attracting both ad dollars and encouraging some subscribers to opt for higher-tier subscriptions.
Amazon’s advertising business, encompassing Amazon marketplace advertisements and Freevee, has emerged as a significant revenue source for the company. In the third quarter, the tech giant reported approximately $12 billion in advertising revenue, marking a notable 26% increase from the same quarter the previous year, as indicated in the company’s financial statement. This underlines the growing importance of advertising in Amazon’s overall business strategy amid the competitive streaming landscape.


Leave a Reply

Your email address will not be published. Required fields are marked *


    No comments found.