Amazon Prime Video Faces Resistance as It Introduces Ads
It seems that even Amazon has its limits when it comes to selling its services. 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 experience on Prime Video.
Starting January 29, Amazon will be launching ads on Prime Video, marking a significant shift for the streaming platform. This move follows the pricing strategy employed by Disney+, where the ad-supported tier is offered at the same price as the current ad-free option, while the cost for ad-free viewing is increased.
CivicScience conducted surveys in October and December to gauge consumer sentiment regarding the introduction of ads on Prime Video. The majority of respondents in both surveys stated that the ads would not affect their usage of the service. However, a combined plurality of respondents in both surveys expressed that they would use Prime Video less frequently or cancel their Prime subscription altogether.
Although the drop in survey responses over time suggests that fewer users will actually cancel their subscriptions, it is evident that Amazon should not expect a surge in subscriber fees once the ad tier is implemented. Additionally, approximately 12 percent of Prime members surveyed admitted to not using Prime Video at all, indicating that they primarily subscribe for other benefits such as free two-day shipping.
These findings align with recent polls showing that 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 significant increase 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.
In light of these trends, Amazon’s decision to introduce ads on Prime Video comes at an opportune time. As ad-supported streaming becomes more widely accepted among consumers, the tech giant can expect to generate substantial ad revenue. Insider Intelligence forecasts that Amazon’s CTV ad revenues will more than double this year, reaching over $3 billion.
While the presence of ads may deter some Prime Video users, it is a necessary step as streaming video evolves into a predominantly ad-supported format.