Amazon Prime Video will next year join streaming rivals in rolling out ads and introducing a higher-priced ad-free tier, as the industry grapples with a slowdown in subscriber growth since the pandemic.
The American tech giant said yesterday ads will be introduced in the US, the UK, Germany and Canada in early 2024, followed by France, Italy, Spain, Mexico and Australia later in the year, a Reuters report stated.
Amazon’s ad-free tier will cost another $2.99 per month in the US, where a Prime subscription currently costs $14.99 per month, or $139 per year. Pricing for other countries will be shared later, the company said.
Netflix and Walt Disney have also rolled out similar measures, hoping a jump in ad revenue would make up for the slowdown in subscriber additions.
However, growth has been slow for the ad-supported plans. To boost subscriptions for the tier, Netflix has scrapped its basic commercial-free plan in the US and the UK, while Disney has raised prices for its ad-free tiers.
Amazon already shows ads on live event content such as NFL’s Thursday Night Football, a practice that will continue even if the subscriber has paid for the ad-free plan, the company said.
The online retail firm does not break out Prime membership numbers, but Business Insider had earlier this year reported Amazon ended 2022 with 168 million Prime members in the US.
After two disappointing earnings reports, Amazon reported better-than-expected quarterly sales growth and profit in August, on the back of an improvement at both of its main growth engines, e-commerce and cloud-computing.
Meanwhile, the media statement put out by Amazon.com Inc. on its website, which was accessed by Indianbroadcastingworld.com, justified the move to introduce advertising in one of the layers of subscription.
“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. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers.
“No action is required for Prime members. We’re not making changes in 2024 to the current price of Prime membership…We will email Prime members several weeks before ads are introduced into Prime Video with information on how to sign up for the ad-free option if they would like.
“Prime is a very compelling value. Prime members enjoy a wide range of shopping, savings, and entertainment benefits…” the statement said.
The statement also didn’t dwell on when the ad-supported subscription option would be introduced in South Asia, including India.