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 tier of Prime Video. This comes as Amazon prepares to launch ads on its streaming platform on January 29, marking a significant shift for the service that has been ad-free for over a decade.
The survey, conducted in October and again in late December, revealed that the majority of respondents believed the introduction of ads would not affect their usage of Prime Video. However, a combined plurality of respondents in both surveys indicated that they would use the service less frequently or cancel their Prime subscription altogether.
While the drop in numbers suggests that fewer users may cancel their subscriptions than initially anticipated, it is clear that Amazon should not expect a surge in subscriber fees with the introduction of the ad-supported tier. Additionally, approximately 12 percent of Prime members surveyed stated that they do not even use Prime Video, 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 lower monthly costs. A survey conducted by CivicScience found that 56 percent of consumers either don’t mind ads or are unwilling to pay more for an ad-free experience.
As Amazon joins the growing trend of ad-supported streaming platforms, it is entering the market at an opportune time. Streaming analytics firm Antenna reported a new monthly high for sign-ups to ad-supported SVOD plans in the U.S., with such plans accounting for over half of premium SVOD sign-ups in November.
While some Prime Video users may be put off by the presence of ads, it is becoming increasingly clear that ad-supported formats are becoming the norm in the streaming industry. Amazon is projected to significantly increase its CTV ad revenues this year, potentially surpassing $3 billion, as it embraces this transformation.
In conclusion, while Amazon Prime Video may face resistance from some users, the introduction of ads is a strategic move that aligns with consumer preferences and industry trends.