Amazon Inc., the famous e-commerce giant, is reportedly the latest company planning to launch an advertising-supported version of the Prime Video streaming service, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
The report added that the company is in the early stages of planning an ad-supported tier for Prime Video as it looks further to grow its advertising business beyond the core e-commerce formats and generate more revenue from entertainment.
Discussions about how to introduce ads to the streaming service have been ongoing over the past several weeks. Advertisers are keen for Amazon to implement the ad-supported tier for Prime Video to promote their ads inside Amazon’s premium films and shows, which are primarily ad-free.
“Creating an ad-supported tier would generate more revenue at a time when the company is more focused on profitability across its businesses and would meet ad buyers’ demand to place ads within buzzworthy streaming content,” states the WSJ report.
The WSJ report notes that by adding more advertisements to content on Prime Video for existing Prime members, the company wants to give them the option to pay for a more expensive ad-free tier and other features.
The report also adds that the e-commerce giant is planning for “short” ad breaks but doesn’t provide more information on how they will be displayed compared to other streaming platforms.
Separately, the WSJ report states that Amazon is also in discussions with Warner Bros. Discovery and Paramount Global about adding the ad-based tiers of their streaming services, Max and Paramount+, respectively, into the Prime Video Channels. Subscribers can currently sign up for ad-free Max and Paramount+ through Prime Video Channels.
Prime Video is currently included with Prime membership for $14.99 per month or $139 per year and as a standalone subscription at only $8.99 per month. At this stage, the ad-supported tier pricing for Prime Video is unknown.
Of late, more and more video streaming services are opting for ad-supported tiers to expand to a broader audience by offering a low-cost plan, given its increasing popularity.
For instance, Amazon Prime Video’s competitors, including Max, Disney+, and more recently, Netflix, all offer a cheaper ad-supported subscription plan for those who cannot afford the premium plan. So, the news of Amazon planning to launch an ad-supported tier for Prime Video doesn’t come as a surprise!
Amazon is yet to comment on the WSJ report.