Another formerly ad-free streaming service is adding commercials to its programming.
Amazon announced Friday morning that its Prime Video service will feature limited ads beginning in early 2024 (an exact date for the rollout is to be determined). What’s more, the ad tier will be the default option for Prime Video, which is included in an Amazon Prime membership along with free shipping on packages, Amazon Music and other perks. The company says the price of a regular Prime subscription won’t rise next year, but users who want to continue watching Prime Video without commercials will have to pay an extra $2.99 per month. Amazon will alert users a few weeks ahead of the introduction of ads on Prime Video with instructions on how to sign up for ad-free viewing.
Prime Video joins previously commercial-free services Netflix, Disney+ and Warner Bros. Discovery’s Max in seeking out the revenue stream that advertising can provide on top of subscription fees (Hulu, Peacock and Paramount+ have had ad-supported plans from their beginnings). Amazon also has the free, ad-supported streamer Freevee, which won’t be affected by the Prime Video change.
Amazon says the inclusion of ads — it promises “meaningfully fewer” commercials than linear TV — on Prime Video will help the streamer keep investing in programming over the long term, including original series and live sports like the NFL’s Thursday Night Football franchise, rights to which come in at $1 billion annually.
Although ad-supported tiers for SVOD services typically come at lower monthly prices — or at no extra cost, in Prime Video’s case — the dual revenue streams can actually make the cheaper offerings more lucrative. “Consumers don’t just tolerate advertising in video content — in most cases, they actually see benefits from it,” Mark Loughney, senior consultant to Hub Research, told The Hollywood Reporter in August. “It allows them to choose their preferred video tiers at lower cost, and when presented right, advertising results in a more engaging viewing experience.”
Ads on Prime Video programming 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 commercials later in the year.