Amazon’s Prime Video is now offering an ad tier, making it the latest move in the company’s growing advertising business. Unlike its streaming rivals, Amazon has made the ad tier standard for all Prime Video users, with an option to pay $2.99 a month for an ad-free version. While some users have expressed displeasure at the change, the extra revenue from ads is expected to boost Amazon’s ability to invest in engaging shows, movies, and live sports. This move is part of Amazon’s larger strategy to improve profitability in its video business, alongside recent layoffs and growth in its cloud and e-commerce operations.
CEO Andy Jassy expressed confidence in Prime Video’s potential to be a profitable business on its own, especially with the introduction of the ad tier. The company’s advertising-services business has been growing steadily, with revenue reaching $14.65 billion in the fourth quarter. Amazon’s dominance in the retail media network space is expected to be further solidified with the addition of the ad tier on Prime Video.
The company’s focus on exclusive content, such as popular shows like “Lord of the Rings” and “Reacher”, as well as its exclusive NFL streaming deal, has been driving viewership and ad sales. Amazon’s recent experiment with shoppable TV ads during an NFL game shows its commitment to innovation in sports advertising. With projections of continued growth in digital live sports viewership, Prime Video is well-positioned to benefit from increased ad spending on its platform.
Overall, Amazon’s foray into advertising on Prime Video is expected to enhance the user experience while providing a significant revenue stream for the company. As the company continues to invest in compelling content and innovative ad formats, Prime Video is poised to become a key player in the streaming and advertising industries.