Amazon’s Prime Video is set to introduce limited advertisements for subscribers in some countries, including the United Kingdom, Germany, and the United States, starting in early 2024. Prime Video subscribers will see commercials between movies and TV shows unless they opt for an ad-free experience by paying an additional $3.83 (£2.99) in certain regions.
This move follows the trend set by rivals like Netflix and Disney, which have introduced less expensive ad-supported packages for cost-conscious users. In a bid to address the post-pandemic slowdown in subscriber growth, major streaming platforms are adjusting their business models, incorporating ad-supported tiers, raising costs, and optimizing content spending to achieve profitability.
According to Amazon’s financial statements, advertising has become an increasingly significant part of the company’s business, contributing to over eight percent of net sales and surpassing income from subscription services in 2022. In an email to Prime Video members, the company explained that the introduction of ads is aimed at supporting continued investments in compelling content and long-term growth.
Amazon assured subscribers that they would not be inundated with ads, promising “meaningfully fewer ads than ad-supported TV channels and other streaming TV providers.” The company had previously announced its intention to introduce ads in various countries, aligning with industry trends.
In the UK, Amazon Prime subscribers currently pay $11.52 (£8.99) per month, which includes access to music and streaming services along with free and fast delivery on packages. However, the company plans to adjust package costs in 2024, potentially increasing fees unless customers choose the ad-free option by paying an additional amount.
With the introduction of limited advertisements, Amazon Prime Video aims to strike a balance between generating additional revenue and maintaining a viewer experience that distinguishes itself from traditional ad-supported TV channels and other streaming providers. Once implemented, the new fee structure will position Amazon Prime Video alongside other streaming services based on pricing and ad options.
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