As the streaming sector struggles with a slowdown in membership growth since the pandemic, Amazon Prime Video will join other streaming competitors in rolling out advertisements and providing a higher-priced tier that is ad-free in the next year.
The American tech giant said on Friday that advertisements would first be shown in the United States, the United Kingdom, Germany, and Canada at the beginning of 2024. This will be followed by the introduction of advertisements in France, Italy, Spain, Mexico, and Australia later that year.
In the United States, the price of an Amazon Prime membership is now $14.99 per month, which comes to $139 a year. Amazon’s ad-free tier will cost an additional $2.99 per month. According to the firm, pricing information for additional nations will be disclosed at a later date.
Both Netflix and Walt Disney have implemented similar changes in the hopes that an increase in advertising income would offset the decline in the number of new subscribers they are adding.
However, growth for the plans that are sponsored by advertisements has been quite moderate. Netflix has eliminated its basic commercial-free plan in the United States and the United Kingdom in an effort to increase the number of people subscribing to its ad-free tier, while Disney has increased the pricing of its ad-free tiers.
Amazon currently displays advertisements on live event material, such as the National Football League’s Thursday Night Football, and the business has said that this practise would continue even if the subscriber has paid for an ad-free subscription.
The firm has said that it intends to have less advertisements than conventional TV and other streaming providers, and it has also stated that it would not increase pricing in 2024 for the existing Prime membership package.
The company that operates the online retail store does not break out the number of Prime subscribers. However, according to figures provided by Insider Intelligence, Amazon Prime now has 157.3 million users, making it the third-largest video-streaming platform in the United States, behind only YouTube and Netflix.
Amazon posted better-than-expected quarterly sales growth and profit in August, after two dismal earnings reports. This was driven by an increase at both of Amazon’s primary growth engines, which are e-commerce and cloud-computing, respectively.