Amazon Prime Video Faces Resistance as It Introduces Ads
According to survey data from CivicScience, less than 10 percent of Amazon Prime members are willing to pay an additional $2.99 per month for an ad-free version of Prime Video. The tech giant is set to launch ads on its streaming service on January 29, marking a significant shift for the platform that has been ad-free for over a decade. Amazon has taken a similar approach to Disney+ by offering the ad-supported tier at the same price as the current ad-free version, while increasing the cost for those who want to continue watching without commercials.
CivicScience conducted surveys in October and late December to gauge consumer sentiment regarding the introduction of ads. The majority of respondents in both surveys stated that the presence of ads would not affect their usage of Prime Video. However, a combined plurality of respondents in both surveys expressed that they would use the service less frequently or cancel their Prime subscription altogether. In October, 51 percent of respondents indicated this, while the more recent survey showed 43 percent.
Although it is expected that fewer users will actually cancel their Prime subscriptions than indicated by the surveys, it is clear that Amazon should not anticipate a surge in subscriber fees once the ad-supported tier is launched. Approximately 12 percent of Prime members surveyed stated that they do not use Prime Video, suggesting that they primarily subscribe for other benefits such as free two-day shipping. Additionally, only 9-10 percent of respondents expressed interest in upgrading to an ad-free subscription.
These findings align with recent polls that show streaming users are willing to tolerate ads in exchange for a lower monthly cost. A survey conducted by CivicScience for VIP+ revealed that 56 percent of consumers either do not mind ads or are unwilling to pay more for an ad-free experience.
Antenna, a streaming analytics firm, also observed a surge in sign-ups for ad-supported SVOD plans in the U.S. In November, such plans accounted for over half of premium SVOD sign-ups for the first time ever.
By introducing ads at a time when ad-supported streaming tiers are gaining acceptance among consumers, Amazon is capitalizing on a growing trend. The tech giant is projected to significantly increase its CTV ad revenues this year, from approximately $1.4 billion in 2023 to over $3 billion, according to an Insider Intelligence forecast.
While the presence of ads may deter some Prime Video users, it is an inevitable consequence as streaming video evolves into a predominantly ad-supported format.