Amazon’s Prime Video will integrate ads into programming in early 2024 to invest in and create more “compelling” content.
“Consumers don’t just tolerate advertising in video content—in most cases, they actually see benefits from it. It allows them to choose their preferred video tiers at lower cost, and when presented right, advertising results in a more engaging viewing experience,” senior consultant to Hub Research Mark Loughney told The Hollywood Reporter.
However, unlike Netflix, Disney+ and Max who offer ad-supported tiers for a lower price, Prime subscribers, who currently pay $14.99 per month, will have to add an extra $2.99 to avoid commercial breaks.
“The recent rise of ad-supported customers supports the theory that people are willing to watch ads to lower their monthly costs, but the future-looking question is: What will subscribers do if pricing adjusts so much that the ad-supported levels rise to the original ad-free prices for the initial service launches?” asked Ken Suh, chief strategy officer of the CTV ad tech firm Nexxen.
Prime’s price hike for ad-free streaming will likely answer this question.
“Streaming viewers are motivated by their mood and mindset in the moment and are sensitive to disruptive, irrelevant, and unsuitable ad experiences. You can’t blame them; they’ve become accustomed to binging every season of their favorite show ad-free for over a decade,” chief Marketing Officer of IRIS.TV, Rohan Castelino added.
The Hollywood Reporter states that ads will appear in both movies and series.
Amazon aims to show “meaningfully fewer ads than linear TV and other streaming TV providers” on Prime programming, while movies will feature a “limited” number of them, a blog post from Amazon explains.
By including ads in programming, Amazon hopes to “continue investing in compelling content and keep increasing that investment over a long period of time.”
Amazon’s content spending increased 30% last year, as Movieguide® previously reported.
The platform’s THURSDAY NIGHT FOOTBALL and RINGS OF POWER likely caused the spike.
But creating meaningful content will be key to enticing subscribers to stay on the platform.
“Consumers have high expectations, and if streamers want to retain and grow their audience, they must prioritize creating relevant content and ad experiences that allow brands to reach viewers in the moments that matter,” Castelino added.
Ads will be introduced in the United States, Canada, United Kingdom and Germany in early 2024 and will land in France, Italy, Spain, Mexico and Australia later in the year.
Amazon plans to join Netflix and Disney+ as the company announced it will begin running ads on its Prime Video service by early 2024…
Amazon’s spending on Prime Video content, including THURSDAY NIGHT FOOTBALL, rose 30% over 2022, likely accounting for the company’s need to rely on an additional source of income…
With ad-tier subscriptions quickly becoming an industry standard, the streaming space is quickly resembling the cable business that it usurped. Industry experts believe that ads on the services will “become more prominent” as time goes on, leading to bigger ad loads and “more opportunities to squeeze in ad messaging along the way, especially if it is perceived as a cost saver for consumers.”
This major shift in business strategy has come as streaming services eschew their former goal of pushing subscriber growth in favor of profitability. However, given the number of players in the streaming sphere and the cost of creating and acquiring new content, this has proven difficult for all these platforms.
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