TV & Video Week in Review

Report Type: 
Week In Review

Amazon bringing ads to Prime Video 

Amazon announced that the company will be rolling out an ad-based experience for all Prime Video users starting in early 2024. Launching in the US, UK, Germany, and Canada, with five more markets being added later, the transition to an ad-supported platform was positioned as being with “meaningfully fewer ads than linear TV and other streaming providers.” If customers want to remove ads (live TV and sports not included), they will need to pay an additional $2.99 per month. In its press release, Amazon said the additional fee will help support content investment. Prime Video is available for $8.99 a month, or as part of an Amazon Prime subscription ($14.99/month or $139/year).

Amazon also announced that new purchases of Fire TV-branded streaming players and smart TVs will get six months of MGM+ for free. The Amazon-owned network is available as a channel within Prime Video or as a standalone app, and normally retails for $6.99 a month.

The Circana Take:

  • While most streamers have added an ad-supported tier and are recruiting into that tier, Amazon is converting its entire user base to ad-supported with a value-add option to escape the ads. This is brilliant, but risky. Keeping the ad-free option at a low price will hopefully appeal to ad-sensitive users, while converting the entire base means advertisers will have a broader audience to target.
  • Amazon is also well-positioned in the marketplace, having experience as one of the major streaming services, as well as broad experience in advertising throughout its many companies. As a result, we expect the switch to an ad-focused solution to be smoother for Amazon than for other companies that are newer to streaming and still developing a user base (Max, Peacock, Paramount+, Apple TV+) or newer to advertising and working to grow those subscription tiers (Netflix, Disney+).