The company announced Friday that its streaming service — a part of Prime subscriptions that cost $14.99 a month — will now have limited ads in its TV series and movies.
Advertising on Prime Video, known for shows such as “The Boys” and “The Marvelous Mrs. Maisel,” will roll out in the U.S. and other cities in early 2024, with other countries to follow later in the year. If U.S. customers don’t want commercials, they will have to pay an additional $2.99 a month. Live events and sports will continue to feature ads in this tier, the company said in its announcement.
Prime customers will get an email in the weeks leading up to the advertising rollout, which will include the option to sign up for the ad-free tier.
“To continue investing in compelling content and keep increasing that investment over a long period of time, starting in early 2024, Prime Video shows and movies will include limited advertisements,” the company said in a post Friday.
Amazon said it plans to have “meaningfully fewer ads than linear TV and other streaming providers.”
Prime Video will now join rival streaming services, including Netflix, Warner Bros. Discovery‘s Max and Disney‘s Hulu and Disney+, that are leaning on advertising. The ad-supported options are not only giving consumers a cheaper option as the list of streaming apps grows, but are also bringing in an additional revenue source.
Media companies in particular have been trying a variety of ways to make the streaming business profitable, from advertising to password-sharing crackdowns to cost cutting.
Streaming behemoth Netflix switched gears late last year and began offering a cheaper, ad-supported plan. Netflix was slow to embrace advertising, but as subscriber growth slowed, the company instituted the option in an effort to boost revenue.
The company recently removed its cheapest, ad-free plan in a push to get more sign-ups for its ad option. Company executives have said the economics of its ad plan were higher than the basic plan, and that advertising is incremental to Netflix’s revenue and profit.
Original news source Credit: www.cnbc.com