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Feb. 1, 2024
Amazon Prime Video Offers Ad-Supported Streaming at an Extra Cost
Amazon Prime Video is shaking up its subscription model by introducing an ad-supported tier for US customers, requiring an extra $3 on top of the existing $139 annual fee. By: Wee Yan Ling
Amazon
Prime Video has revealed their new ad-supported tier for its US customers as it
adds a new dimension to the streaming service. Subscribers now will have to pay
an additional $3 on top of the existing $139 annual fee to enjoy the ad-free
streaming experience. This strategic move places Amazon in the league of
streaming services as they leverage on advertising to boost their revenue. This
is backed up with analysis from MoffettNathanson projecting a $2 billion
windfall from their ad-play by 2025.
The
sets the streaming giant apart from the others in the arena is the approach to
default their subscribers to the ad-supported tier as compared to other
streaming giants such as Netflix as they offered a separate lower cost option
with advertisements. It is salient to note that Netflix is in the mindset of
phasing out its without-ads basic offerings in key markets, including the
US.
As
the streaming landscape continues to evolve, the move by Amazon Prime Video
reflects a broader industry trend. Apple TV+ remains a notable exception as
they hold out against incorporating ads to their service while streaming giants
like Netflix, Disney+ and HBO Max succumbed to the allure of utilising
advertising to bolster their revenue as they experience a slowdown in
subscriber growth.
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