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Amazon Prime Video tipped to follow Netflix with ad-supported tier

Amazon is rumoured to be working on following the lead set by Netflix and Disney in adding an ad-funded tier to its Prime Video streaming service.

Both Netflix and Disney introduced ad-subsidised plans late last year amidst challenging times for the saturated streaming market. Now a new report from The Wall Street Journal claims that rival Amazon Prime Video is following suit.

The discussions for such a tier are said to be in their early stages, and come in the wake of some painfully familiar cost-cutting reviews and mass-layoffs at Amazon.

One thing Amazon hasn’t been struggling with is advertising revenue, which was up 21% year over year for the first quarter of 2023. All of which makes you wonder why the company has only just started thinking about sprinkling that ad magic on its popular (but not leading) video streaming service.

Advertisers are already said to be applying pressure to the company to add an ad tier to Prime Video, especially when it comes to premium movies and buzz-creating programs.

Amazon Prime Video’s considerable sports coverage already comes with ad coverage, while its Freevee service is inherently ad-supported. However, Prime Video originals like The Marvelous Mrs. Maisel, Jack Ryan, and The Lord of the Rings: The Rings of Power have remained purely premium subscription concerns up to now.

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The report also claims that Amazon is having conversations with Warner Bros. Discovery and Paramount Global to offer ad-based tiers of their own services through their Prime Video sub-channels.

It’s not yet known how Amazon would apply this ad tier. One suggestion is the approach that Disney has taken with its own early ad-based offerings, adding ads at the existing price and bumping the price you have to pay to keep watching the service without ads. Amazon has form with this ‘upselling’ approach, having done something similar with Amazon Music.

Whatever the final form, it’s claimed that Amazon wants its ad breaks to be short.

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