Amazon will implement “limited advertisements” on its Prime Video streaming service From July 2nd this year.
Currently, users of the $9.99 a month service are subjected to one ad before the start of an episode that promotes an Amazon Prime television series or film. The new ads, on the other hand, will automatically play during television shows and films, with users needing to pay an additional $2.99 for an ad-free version to avoid seeing them.
“Starting July 2, Prime Video movies and TV shows will include limited advertisements. This will allow us to continue investing in compelling content and keep increasing that investment over a long period of time. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers,” Prime Video said in an email to users yesterday.
In the email, the streaming giant confirmed that there would be “no other changes” to Prime memberships either on the streaming service or on the Amazon Marketplace.
Prime Video users in the United States, Germany, and the United Kingdom were hit with similar price increases earlier this year to enjoy ad-free content.
Ori Gold, CEO of Bench Media, told B&T that while this kind of shift has worked in the US market, the Australian space presents unique challenges.
“In the US, Amazon enjoys a dominant position with over 80% household Prime membership and a significant Prime Video market share exceeding 20%. This established user base likely made the ad-supported tier a more palatable option,” he said.
“Here in Australia, Amazon’s Prime membership and Prime Video market share are considerably lower. This lack of market penetration could lead to subscriber churn. Unlike Netflix, which introduced a lower-priced ad tier, Amazon’s strategy might be perceived as a price increase with the addition of ads, potentially frustrating viewers. Additionally, Australian viewers may be less accustomed to ads within traditionally ad-free services like Prime Video”.
According to Gold, this move could see Australians switch to competitors with more “attractive price points, such as Netflix, Binge, or Disney+”, similar to what has already happened in the UK market.
B&T contacted Amazon for further information about the changes but was referred to a blog post that did not provide the information requested.
