Ads May Be Coming to Amazon Prime Video

(Photo credit: Glenn Carstens-Peters/Flickr)
(Photo credit: Glenn Carstens-Peters/Flickr)

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Just think of it as Amazon trying to make sure you have plenty of breaktime during your favorite shows to, you know, grab a snack, use the bathroom, and maybe even make an impulsive online shopping purchase.

On Wednesday, the Wall Street Journal reported the e-commerce giant is considering adding an ad-supported tier to Prime Video. It’s just the latest attempt from streamers to bolster paltry revenue streams.

Prime Time Commercials

It’s been a little over a year since the great Netflix correction — when the streaming pack leader reported a decline in subscribers for the first time ever, sending investors into a tizzy and turning the streaming industry’s growth-over-everything philosophy on its head. “Wall Street woke up and said, ‘Actually, profitability is the only metric,’” one anonymous senior executive at a major streamer recently told New York Magazine.

To stabilize its suddenly-shaky subscription revenue, Netflix has introduced once-forbidden commercials on its platform via a cheaper ad-supported $6.99 subscription tier, which the service now claims is more lucrative on a per-subscriber basis than the standard $15.49 per month plan. Disney and Warner-Discovery quickly followed suit with their own streaming services, and now Amazon — an all-encompassing giga-giant for whom streaming remains more of a curio — appears to be doing the same:

  • Amazon has already dipped its toes in streaming ads, via commercial breaks during its sports broadcasts, like the NFL’s Thursday Night Football, and via FreeVee, its free ad-supported streaming TV (FAST) service that rivals Tubi and Pluto.
  • Prime Video is currently included with all Amazon Prime subscriptions and is available as a standalone service for $8.99 per month. The e-commerce giant is considering adding ads for all existing users and introducing a more expensive ad-free tier, sources told the WSJ.

Ads have already become an increasingly important piece of Amazon’s e-commerce business, generating $9.5 billion in the first quarter, up 21% year-over-year. Meanwhile, it spent $7 billion last year on original streaming programming, sports rights, and licenses to third-party shows and movies, CFO Brian Olsavsky said in February.

What Channel Is It On? Commercials aren’t the only alternative revenue model streamers are starting to explore. After spending billions to create new platforms to serve as the exclusive home for their back-library of content (often walking away from lucrative licensing deals in the process), entertainment conglomerates are once again interested in selling their content to third parties — meaning the next time you want to watch The Lion King, it may not be on Disney+. What exactly are we paying these streaming services for again?