Amazon Prime is set to enter the competitive arena of streaming services with advertising, slated to debut in early 2024. This strategic move by the tech giant will intensify the ongoing battle for viewers in an already fiercely contested market. In an announcement made on Friday, Amazon disclosed that current U.S.-based Prime members will need to shell out an additional $2.99 per month to continue enjoying an ad-free experience on their Prime Video subscription.
While this pricing update has raised eyebrows, international users outside the U.S. will have to wait for Amazon to reveal the pricing structure for their ad-free programming at a later date. It’s a notable contrast to the pricing models of rival streaming services, such as Disney and Netflix, who charge significantly more for ad-free access. Disney recently unveiled its ad-free streaming offering at $13.99 per month, a steep 75% premium over the ad-supported version, while Netflix commands a monthly fee of $15.49 for its ad-free plan.
Amazon is justifying this transition by asserting that the inclusion of advertisements during movies and shows on Prime Video will enable the company to maintain its commitment to delivering high-quality content. According to an Amazon spokesperson, this move will empower them to “continue investing in compelling content and keep increasing that investment over a long period of time.”
To ensure transparency and give users the option to stay ad-free, Amazon will send Prime Video users an email notification several weeks before the introduction of ads. The email will contain instructions on how to opt for the ad-free subscription if they so desire. It’s worth noting that Amazon Prime’s live events, including sports, already feature advertising.
Critically, Amazon Prime membership encompasses more than just Prime Video. It also offers free shipping for Amazon.com products, access to groceries, music streaming, and more, with pricing for these services remaining unchanged.
This announcement comes on the heels of a legal tussle for Amazon. In June, the Federal Trade Commission (FTC) accused the company of enrolling consumers into Amazon Prime without their consent and making it challenging for them to cancel their subscriptions. Amazon swiftly refuted the FTC’s allegations, labeling them as false.
The decision to introduce advertisements into the Prime Video platform is not without risks. In a fiercely competitive landscape, streaming viewers have become increasingly discerning about the value, pricing, and content offered by various services. Amazon is wagering that this new advertising model, which includes limited advertisements during Prime Video films and shows, will enable it to sustain and grow its investments in high-quality content. Whether this gambit will win over viewers or prompt Amazon to reassess its plans remains to be seen.
In the coming months, Amazon will closely monitor the reception of its advertising-inclusive Prime Video service, gauging its impact on user engagement and the streaming market as a whole. As the streaming wars rage on, the company’s strategy will be under intense scrutiny, with viewers and competitors alike awaiting the outcome of this bold move into the world of advertising-supported content.
Source: AP News
