Amazon Prime Video to have less advertisements

Starting early next year, subscribers to Amazon’s Prime Video streaming service will encounter commercials in films and TV shows unless they opt for an ad-free experience at an additional cost of £2.99. Amazon announced that customers in the UK and Germany will see “limited advertisements” in streaming content after 5 February, while Prime Video users in the US will experience ads from 29 January.

This move by Amazon follows a trend set by competitors like Netflix and Disney, which have introduced cheaper ad-supported streaming packages in response to a post-pandemic slowdown in subscriber growth. However, Amazon’s ad-supported tier does not come at a lower cost; instead, customers who prefer an ad-free experience will need to pay an additional fee.

In an email to Prime Video members, Amazon explained that introducing ads would enable the company to “continue investing in compelling content and keep increasing investment over a long period of time.” The company assured users that they won’t be inundated with ads, emphasizing that there will be “meaningfully fewer ads than ad-supported TV channels and other streaming TV providers.”

Amazon’s decision to incorporate advertising aligns with its plans revealed earlier in the year to introduce ads in various countries, including the UK, US, Germany, and Canada. The Prime subscription, which encompasses access to music and video streaming services, as well as additional perks like free and fast delivery, is priced at £8.99 per month in the UK. Amazon stated that the overall service price will remain unchanged in the coming year, unless users opt for the ad-free option.

Netflix, which began rolling out its ad-supported tier in late 2022, has reported approximately 15 million global customers subscribed to it. The basic ad-supported tier from Netflix is priced at £4.99 per month, considerably lower than its standard ad-free package costing £10.99. Disney+ offers a service with ads for £4.99 per month, launched in the UK in August, or a standard ad-free package for £7.99.

The introduction of advertising on Amazon Prime Video marks a significant shift in the streaming landscape, where major platforms are exploring new revenue streams and pricing models to adapt to changing market dynamics. Amazon’s decision to incorporate ads is driven by a desire to maintain profitability and continue investing in high-quality content amid a competitive streaming landscape.

The move aligns with industry trends where streaming services are diversifying their offerings to appeal to a broader range of consumers. Rivals like Netflix and Disney have already embraced ad-supported tiers to attract cost-conscious viewers, presenting a more affordable option while introducing a new revenue stream through advertising.

While the introduction of ads on Prime Video may face some resistance from subscribers who have grown accustomed to an ad-free experience, Amazon is emphasizing that the number of ads will be limited compared to traditional TV channels and other streaming providers. Striking a balance between generating revenue through ads and maintaining a positive user experience will be crucial for Amazon’s long-term success in this venture.

Amazon’s decision to keep the overall subscription price unchanged for Prime, with the option for users to pay extra for an ad-free experience, reflects a strategy to offer flexibility to consumers based on their preferences.

The streaming industry’s evolution, including the integration of advertising, signals a maturing market where providers are exploring various strategies to sustain growth, cover rising production costs, and cater to a diverse audience. As streaming services continue to evolve, user preferences, competition, and market dynamics will shape the future of the industry, with each platform experimenting with different models to find the right balance between revenue generation and user satisfaction.