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There are ads on Amazon’s Prime Video.

The company announced Friday that its streaming service — part of Prime subscriptions that cost $14.99 a month — will now offer limited advertising on its TV shows and movies.

Advertising on Prime Video, known for shows like “The Boys” and “The Marvelous Mrs. Maisel,” will launch in the U.S. and other cities in early 2024, with more countries to follow later in the year. If US customers do not want advertising, they must pay an additional $2.99 ​​per month. Live events and sporting events will continue to feature ads at this level, the company said in its announcement.

Prime customers will receive an email in the weeks leading up to the ad rollout with the opportunity to sign up for the ad-free tier.

“In order to continue investing in compelling content and continue to grow those investments over time, Prime Video shows and movies will contain limited advertising beginning in early 2024,” the company said in a post Friday.

Amazon said it plans to “run significantly less advertising than linear TV and other streaming providers.”

Prime Video now joins rival streaming services, including Netflix, Warner Bros. Discovery’s Max, and Disney’s Hulu and Disney+, that rely on advertising. The ad-supported options not only provide consumers with a cheaper option as the list of streaming apps grows, but also bring with them an additional revenue stream.

Media companies in particular have tried to make the streaming business profitable in a variety of ways, from advertising to password-sharing crackdowns to cost-cutting.

Streaming giant Netflix switched gears late last year and began offering a cheaper, ad-supported plan. Netflix has been slow to introduce advertising, but as subscriber growth slowed, the company introduced the option to increase revenue.

The company recently eliminated its cheapest ad-free plan to attract more signups for the advertising option. Company executives said the economics of the advertising plan are higher than the baseline plan and that advertising increases Netflix’s sales and profits.

Source : www.cnbc.com

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