Amazon Plans Ad Tier For Some Prime Video Services – Report

Amazon is reportedly considering a change for its Prime video streaming service, which is currently advert free for those paying for its Prime service.

According to a report in the Wall Street Journal (WSJ), which cited people familiar with the matter, Amazon is planning to launch an advertising-supported tier on its Prime Video streaming service.

The move is to help Amazon further develop its ad business and generate more revenue from entertainment, and comes after rivals such as Netflix and Walt Disney adopted similar plans.

Amazon Prime

According to the WSJ report, the discussions are in the early stages and have been going on over the past several weeks. The development comes in the wake of cost-cutting reviews across the company’s businesses.

Amazon is currently laying off 27,000 people from its workforce.

The WSJ reported that advertising has been an area of continued growth for Amazon despite macroeconomic challenges. The company’s ad revenue was $9.5 billion in the first quarter, up 21 percent year over year.

The WSJ reported (citing Insider Intelligence) that Amazon is the third-biggest player in terms of digital ad revenue in the US after Google and Meta.

It should be noted that Amazon has been making moves to bring more ad-supported programming to Prime Video. For example its sports coverage comes with ads, and some shows have product-placement advertising.

Prime Video Channels

According to the WSJ report, Amazon is having discussions with Warner Bros. Discovery and Paramount Global about adding the ad-based tiers of their streaming services through Prime Video Channels.

Through Prime Video Channels, users can sign up for streaming services – including the ad-free versions of Max and Paramount+ – and view through the app.

Representatives for Amazon, Paramount and Warner Bros. Discovery declined to comment, the WSJ reported.

It also reported that Amazon is discussing a variety of ways it could introduce ads in Prime Video, people familiar with the matter said.

One option would be to bring more advertising to existing Prime subscribers and give them an option to pay more for an ad-free alternative and other features, some of the people reportedly said.

The company is planning for the ad breaks to be short, the people reportedly said.

Amazon hasn’t decided yet on its plans, and could decide not to move forward with an ad tier, the people said.