January 30, 2024 – Amazon has reportedly begun rolling out advertisements on its Prime Video service in the United States, a move that is anticipated to open up a new revenue stream for the retail giant.
Industry experts are estimating that this new venture could generate up to 5billionannuallyforAmazononcefullyimplemented.Ofthissum,3 billion is expected to come directly from ad sales, while an additional 1.8billionisprojectedtobeearnedfromPrimememberswhoopttopayanextramonthlyfeeof3 for an ad-free experience.
According to New York-based analyst Sky Canaves, Prime Video might represent Amazon’s best hope for realizing its vision of shoppable television. The integration of shoppable video ads into its content strategy is aimed at enticing brands already selling on Amazon to advertise on Prime Video as well.
In an effort to appease its customer base and avoid alienating viewers, Amazon has pledged to show fewer ads than what is typically seen on traditional television or other streaming platforms.
It is speculated that a majority of viewers will tolerate the advertisements, partly because the Prime Video service is bundled with the Prime subscription, which offers benefits like fast shipping, music streaming, and more. Analysts predict that approximately 70% of Prime subscribers will likely choose to endure the ads rather than pay the extra charge for an ad-free viewing experience.