With the rising costs of producing content, more and more streaming services are starting to switch over to cheaper ad-supported subscriptions in the hope of attracting more people to their services. Amazon Prime Video is the latest company to do so, and they predict big results from their foray into ad-supported streaming.
Amazon Prime Video Ads
As Amazon Prime is only the second global streaming service to take the plunge into ad-supported content, with Disney Plus the first, it is unknown how this service will pan out for the customer.
At the moment, Amazon Prime seems to be running video ads once or twice per piece of content, so about the same number of ads that you would get if you were watching on television outside of the United States. It is likely that the number of ads displayed will change as Amazon Prime Video starts to pick up more subscribers for their ad-supported tier. This is because advertisers will likely wish to know what sort of success rate their ads are likely to have on the platform. Amazon will be tracking all this.
It is worth noting that Amazon Prime Video is doing things a little bit differently from other streaming services. Amazon Prime Video’s base package (i.e. the one that you get included with Prime Shipping) will have ads included as default, everybody will get them, eventually (although, it is currently just limited to new subscribers). Those who wish to get rid of the ads will need to pay a further $2.99 per month, and Amazon is quite pushy when it comes to moving people over to the ‘no-ad’ option since they’ll make more money that way.
From what we have seen, some people are a bit irritated at the way Amazon is handling their adverts, but considering Amazon is one of the cheapest around for streaming services since you get so much else included with your Prime Video subscription, it isn’t really a massive issue.
Unfortunately, you cannot use an Amazon gift card code to upgrade your Prime Video subscription to an ad-free version, but you can use that code to buy other awesome things on the Amazon platform.
Predicted Earnings of $2 billion
Amazon has told its investors that they have 200 million Prime Subscriptions around the world, and each of these people will have access to the ad-supported tier of Prime Video. They estimate that each month, about 159 million people will see ads on their service, assuming they do not upgrade to the ad-free version.
At the moment, the prediction is that in 2025, Amazon will earn $2 billion from ad views on their Prime Video service alone, which is more than enough to fund the bulk of the content they are producing. This is $2 billion more than they would have made otherwise and, as you can imagine, the investors are quite pleased with this.
This is assuming that Amazon Prime Video continues to grow at the rate that it does. Do bear in mind that Amazon Prime Video is a distant fifth in terms of content views in the United States. They are beaten by Disney+, Hulu, Netflix, and Peacock. Unless Amazon Prime continues to invest in quality content, it will remain this far down. However, the bulk of the income on Amazon comes from the other services they provide anyway, so it is unlikely to be a big deal for them.
How This Change Could Shape the Streaming Industry
Netflix has already pledged not to go down the route of ad-supported tiers on their service, although things could obviously change on that front.
It is likely that many of the top streamers are looking to see how things pan out for Amazon Prime and Disney+. If they notice the amount of cash the services generate goes up considerably, and the ad-supported tier drives more people to sign up for the platform, then they could be moving their services towards ad-supported too.
Of course, some people are a bit dubious about how the industry is going. While the ad count per content is quite low at the moment, many people online believe that if ads are as popular as expected, there is a good chance that we could go back to the cable TV days when a good 25% of the content you watch will be ads. Unfortunately, because these ads will be online, there’ll be a lot less oversight of the ads than on TV too, which could make the issue worse.
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