Amazon Considering Ad-Supported Streaming Service for Prime Video

Amazon.com is considering an advertising-supported tier for its Prime Video streaming platform as a way to boost its entertainment and advertising revenue, The Wall Street Journal reported. Amazon would join rivals such as Walt Disney and Netflix that have rolled out ad-supported subscription tiers.

Amazon’s ad revenue reached $9.65 billion in the last quarter, working out to an annual run rate of about $40 billion. It was its fastest-growing business in the quarter. Advertisers want access to premium movies and programs that are now mostly ad-free.
Amazon Prime members, who pay $14.99 a month, get Prime Video as part of the package. The streaming platform is also available for $8.99 a month, but that doesn’t include features such as same-day delivery on Amazon orders. Prime Video shows include The Marvelous Mrs. Maisel and Thursday Night Football.
One option would be for Amazon to insert more ads into its standard service for Prime subscribers, while offering them a chance to pay more for an ad-free viewing experience, the Journal reported. Amazon has been pushing to trim costs, including cutting its head count by 27% in 2022.
Shifting the Prime subscriber offering could lead to some consumer revolt, although that could depend on how much subscribers would have to pay to keep Prime ad-free. Amazon declined Barron’s request for comment.

What’s Next: Amazon is also talking to Warner Bros. Discovery and Paramount Global about adding their ad-based streaming tiers through Prime Video Channels, and considering bidding for the rights to stream National Basketball Association games starting in 2025, the Journal reported.

—Eric J. Savtiz and Janet H. Cho