Amazon might be planning to launch an ad-supported tier of its Prime Video streaming platform.
The company wants to expand its ad business and increase revenue from entertainment, said The Wall Street Journal, citing unnamed sources.
The discussions are apparently still “in the early stages” and have been going on for a few weeks.
Amazon provides Prime Video as a standalone subscription for $8.99 per month if you just want to pay for the entertainment content.
Alternately, it’s $14.99 per month for Prime membership. This plan offers customers free two-day shipping on products purchased through Amazon, plus extra privileges like music and Prime Video streaming.
People familiar with the situation said that the company is considering a number of ways for how it can integrate advertisements into Prime Video.
One choice would be to serve more advertising to current Prime users and give them the choice to pay extra for an ad-free alternative and other advantages.
That sounds like a price hike, if you ask us.
Recently, Amazon adopted the following strategy with its Music service: More songs were made available to Prime subscribers at no extra cost.
But the ability to download most songs was removed in exchange for a pricier upgrade.
“Creating an ad tier would help Amazon cover the costs of creating its shows and movies”, the WSJ report said.
In February 2023, Amazon’s chief financial officer, Brian Olsavsky, had stated that the company spent around $7 billion last year on Amazon Originals, live sports programming and licensed third-party video content offered as part of Prime Video.