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The decision would see Amazon follow in the footsteps of other streaming services like Netflix and Disney+, that have looked at subscriptions with ads as a way to boost revenue.
Amazon is looking at bringing in an ad-supported subscription tier for Prime Video as a way to boost its income, according to The Wall Street Journal and Axios.
The decision could help boost the company’s advertising revenue and draw in more subscribers to Prime Video with a cheaper subscription offering. However, it is possible that adverts will be shown to existing Prime subscribers, with the option to pay more to stream ad-free.
Sources told The Wall Street Journal that discussions are in the early stages and have been ongoing for several weeks. Meanwhile, a source told Axios that the plan was recently approved by Amazon leadership, though sources told The Wall Street Journal that the plans have not been firmed up.
It has not been confirmed when the new ad-supported subscription tier will be introduced, though The Wall Street Journal notes that some ads are already included in the streaming service’s sports coverage.
Amazon Prime Video is a major streaming service in the competitive market, with statistics suggesting it was only behind Netflix and Disney+ in terms of mobile app downloads last year.
The decision comes amid a period of cost cutting for Amazon, as the tech giant had disappointing financial results in 2022. In March, Amazon revealed plans to let go of 9,000 employees on top of the 18,000 it laid off in January.
Amazon’s earnings results at the end of April showed a turnaround for the company, with a surge in both revenue and profit.
Ad-supported streaming
The decision would see Amazon follow in the footsteps of other streaming services like Netflix and Disney+, which have looked at subscriptions with ads as a way to boost revenue.
Netflix rolled out a cheaper subscription model to various countries towards the end of 2022. The company has also been working on a password-sharing crackdown as a way to monetise account sharing.
Last month, Disney revealed plans to raise the prices of Disney+ ad-free subscriptions, while bringing its cheaper ad-based subscription model to Europe by the end of 2023. This decision was made as Disney suffered a hit to its streaming division, with its core Disney+ service losing 4m subscribers in a quarter.
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