In a strategic move aimed at diversifying revenue streams and addressing the challenges of slowed subscriber growth, Amazon Prime Video is set to introduce advertisements in 2024. Additionally, the tech giant will unveil a higher-priced ad-free tier, bolstering its presence in the competitive streaming industry. This article delves into the details of Amazon’s upcoming changes, exploring the impact on subscribers and the streaming landscape.
Ads Coming to Amazon Prime Video
Starting in early 2024, Amazon Prime Video will introduce ads to its streaming platform in several key markets, including the United States, the United Kingdom, Germany, and Canada. This move signifies Amazon’s intent to tap into the lucrative advertising market within the streaming sector. The introduction of ads will be followed by their rollout in France, Italy, Spain, Mexico, and Australia later in the same year.
A New Ad-Free Tier
In conjunction with introducing ads, Amazon plans to offer a higher-priced ad-free tier for its Prime Video subscribers. In the United States, this premium tier will come with an additional cost of $2.99 per month, on top of the existing Prime subscription fee of $14.99 per month or $139 per year. Pricing details for other countries are yet to be disclosed.
Following in the Footsteps of Streaming Competitors
Amazon’s decision to introduce ads and an ad-free tier echoes similar moves by streaming giants Netflix and Walt Disney. These companies are betting on increased ad revenue to compensate for the sluggish growth in subscriber numbers. However, the growth of ad-supported plans for these platforms has been slower than expected. To bolster subscriptions for their ad-free tiers, Netflix has phased out its basic commercial-free program in the U.S. and UK, while Disney has raised prices for its ad-free options.
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Amazon’s Existing Advertising Initiatives
It’s worth noting that Amazon Prime Video has already dabbled in advertising by displaying ads on live event content, such as NFL’s Thursday Night Football. This practice will persist even for subscribers who opt for the ad-free plan. Amazon emphasizes that it intends to have fewer ads than traditional TV and other streaming providers. Importantly, the company asserts that it will not raise prices for the current Prime membership plan in 2024.
Prime Video’s Standing in the Streaming Landscape
Although Amazon does not publicly disclose its exact Prime membership figures. Industry estimates place Amazon Prime as the third-largest video-streaming platform in the United States, boasting approximately 157.3 million subscribers. It lags behind only YouTube and Netflix in terms of subscriber numbers. After experiencing two consecutive disappointing earnings reports, Amazon saw a turnaround in August, reporting better-than-expected quarterly sales growth and profit. This resurgence was attributed to improvements in its primary growth engines, e-commerce, and cloud computing.
In conclusion, Amazon’s decision to introduce advertisements on Prime Video and offer an ad-free tier in 2024 reflects the evolving dynamics of the streaming industry. The company seeks to bolster its presence in this highly competitive landscape. The subscribers can anticipate both new advertising experiences and premium options to suit their preferences. These changes may well redefine the streaming experience and its associated costs for Amazon Prime members in the coming year.
