Amazon to introduce ad tier for Prime Video streaming service

Amazon.com is planning to launch an advertising-supported tier of its Prime Video streaming service, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. Also Read: Amazon Prime Video Down: Users In India And Other Regions Report Widespread Streaming Outage

Discussions around the ad tier have been going on for several weeks, according to the report, and follow the launch of similar plans by rivals Netflix and Walt Disney. Also Read: Amazon Prime Video gets redesigned UI with content bar, AI recommendations

The streaming industry has been facing a slowdown in new sign-ups as subscribers struggling with high inflation and interest rates dial back entertainment spending and other discretionary expenses. Also Read: Upcoming Movies launching on OTT in July 2024: Wild Wild Punjab, Space Cadet, and more

The WSJ report also said Amazon was holding discussions with Warner Bros Discovery and Paramount Global about adding the ad-based tiers of their streaming services through Prime Video Channels.

Warner Bros Discovery and Paramount did not immediately respond to Reuters’ requests for comment, while Amazon declined to comment.

Shares of Amazon were lower more than 3% on Wednesday, in line with a weak broader market.

“In recent years, Prime Video has gotten more aggressive about running promos prior to its shows and including ad-filled sports broadcasts,” said Ross Benes, Insider Intelligence principal analyst.

Sports coverage on Prime Video already comes with ads.

“Officially putting ads into Prime Video allows Amazon to centralize its audience and be more consistent with branding,” Benes added.

— Reuters