Amazon is following the lead of nearly every other streaming service — including Disney+, Netflix and HBO’s Max — in announcing that it will begin running ads on its programming in early 2024. Prime members who wish to avoid commercials will have the option to upgrade to a new ad-free tier for $2.99 per month.
Amazon’s announcement of its plans had an almost apologetic undertone. The bulk of the statement was spent touting the larger benefits of Prime membership and how those benefits have expanded since the offering first debuted in 2005. The company also promised that it would not increase the price of Prime membership in 2024. “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,” said the company in the statement, adding that “we aim to have meaningfully fewer ads than linear TV and other streaming TV providers.”
Indeed, the news likely will be received with a bit of consternation, although probably not surprise, from consumers. But for brands, this is almost certain to be a welcome development. With the vast changes taking place in digital advertising and TV viewership, connected TV (CTV) is one of the hottest new advertising channels, appreciated by advertisers for advanced targeting and measurement capabilities that aren’t available for traditional linear TV campaigns.
Not only does Amazon want a piece of those ad dollars, but given the company’s foundation in retail, the opportunity to explore additional opportunities in the realm of shoppable TV experiences must be hard to resist. Most of the shoppable TV experiences happening today are currently activated via advertising.
Amazon already is working to make some of its content shoppable through dedicated Amazon.com storefronts for TV shows and films, as well as with product integrations in its Prime X-Ray feature. The addition of advertising will unlock these capabilities even further, allowing Amazon to catch up and potentially even leapfrog the competitors making moves in the space, including NBCUniversal and Walmart.
Ads in Prime Video content will be introduced in the U.S., UK, Germany and Canada in early 2024, followed by France, Italy, Spain, Mexico and Australia later in the year. No action will be required for Prime members, except those who wish to upgrade to the ad-free tier. The ad-free option will cost an additional $2.99 for U.S. Prime members, with pricing in other countries to be shared at a later date.