Amazon Prime Will Have Video Ads from Next Year, Amazon Confirms
Key takeaways
- Amazon plans to introduce advertising on Prime Video as soon as next year
- The move follows similar plans from Netflix and Disney
- Amazon’s share price rose as much as 1.9% at the announcement
In more “How the hell does streaming differ from cable these days” news, Amazon plans to introduce ads to its Prime Video streaming platform next year. It follows in the footsteps of rivals Disney, Netflix and others to try and make some kind of profit after investing billions of dollars into the platforms.
Wall Street liked the move, with Amazon’s share price increasing in reaction to the announcement. Here’s everything you need to know about yet another streaming service introducing ads.
What’s happening with Amazon Prime?
Amazon confirmed on Friday that it intends to add advertising to its Prime Video platform next year. It’s the latest in a long line of movies from streaming companies like Disney and Netflix to try and make the service profitable under inflationary headwinds.
Amazon said the ads would be introduced to the U.S., U.K. and Canadian markets in early 2024, with other markets soon joining in the fun. (Ahem.) Amazon will offer an ad-free tier for an additional $2.99 monthly in the U.S.
In a blog post, Amazon said the move was “to continue investing in compelling content and keep increasing that investment over a long period of time” and that Amazon “[aims] to have meaningfully fewer ads than linear TV and other streaming TV providers”. We’ll believe that when we see it.
The shopping giant and streaming service also doesn’t intend to make any price changes in 2024 — except it does, really, because the hope is you’ll go for the more expensive ad-free tier. Sneaky.
At around $17.98 a month, Amazon’s new ad-free tier is more expensive than its peers, though Amazon Prime members get plenty of other benefits from the subscription. Netflix now charges $15.49 for its ad-free standard plan, while Disney’s latest ad-free streaming price will be $13.99 from October 12.
What was the market reaction?
Amazon stock was up as much as 1.9% during Friday trading, with Netflix and Disney also seeing slight climbs in their share prices of 0.3% and 0.2%, respectively. Amazon’s share price has risen over 53% since the start of the year; Netflix has enjoyed a 30% boost to its stock, but Disney’s share price has fallen 9% in 2023 thanks to a string of headwinds.
Streaming platforms have been a headache for the big studios ever since Netflix grew in popularity and switched everyone from cable TV to streaming. Disney’s latest earnings report showed Disney+ lost 12 million subscribers to hit 146 million in total.
Netflix was suffering a similar fate until it made the controversial decision to crack down on passwords, which saw the streaming service’s quarterly subscriber count soar by 6 million. As a result, Disney has said it plans to introduce similar measures.
The bottom line
Amazon is simply following the herd when it comes to introducing adverts on Prime Video. At the end of the day, it’s the consumers who lost out — so all of these streaming services might find themselves shedding subscribers quicker than before, though that remains to be seen.
