Amazon’s Prime Video recently introduced a new ad tier, shaking up the streaming landscape. Unlike its competitors, Amazon made the ad tier standard for all Prime Video users, charging an extra $2.99 a month for an ad-free version. While some users are unhappy about the change, the additional revenue from ads is expected to enhance the platform’s content offerings, including engaging shows, movies, and live sports.
CEO Andy Jassy expressed confidence in Prime Video’s potential to be a profitable business on its own, with the ad tier playing a significant role in this vision. The move is also expected to boost Amazon’s advertising-services business, which saw a 26% year-over-year growth in revenue in the fourth quarter.
With Amazon’s dominance in the retail media network space, owning a significant content business gives the company an edge in attracting advertisers. The potential for growth in streaming TV advertising is promising, with Amazon continuously looking for ways to increase advertising on its streaming properties.
In addition to its content strategy, Amazon has made significant strides in sports broadcasting, including an exclusive deal with the NFL to stream Thursday Night Football on Prime Video. The company’s innovative approach to advertising during sports broadcasts, such as shoppable TV ads, is positioning it as a disruptive force in sports advertising.
As digital live sports viewership is expected to grow, Prime Video stands to benefit from increased ad spending on its platform. With its strong presence in the streaming market and a focus on engaging content and innovative advertising formats, Amazon is poised for continued success in the streaming and advertising space.