Amazon Prime Video will start showing ads during TV shows and movies from early next year. Prime members can pay optional fee of $2.99 to keep their viewing experience ad-free.
This doesn't come as a huge surprise, as many competing streaming platforms have turned to advertising—and higher subscription fees—to keep their heads above water. Late last year Netflix introduced an ads tier subscription for $6.99 per month, and Disney+ followed suit with their Disney+ Basic option for $7.99. We've also seen continous price hikes from all the major players, caused by dwindling subscriber numbers and increased production and licensing costs.
Many believe streaming has peaked as companies struggle to remain profitable and grow subscribers. Last year Netflix reported their first ever subscriber decline since 2011, with Disney+ losing over 4 million subscribers in Q2 2023. The streaming landscape has become very competitive and global inflation has put pressure on consumer spending.
Instead of focusing on new content, streaming services are now trying to minimise losses through advertising and password-sharing crackdowns. These companies are also laying off staff and cutting expenses, which means the platforms aren't as content-rich as before. By the end of 2022, only Netflix and Hulu will be among the top streaming services to turn a profit.
Amazon said it won't be making any changes to its monthly Prime fee, and members will receive an email several weeks before ads are introduced into Prime Video with information on how to sign up for the ad-free option.
Amazon believes their service is compelling value at $14.99 per month. In addition to Prime Video, members enjoy many other benefits like free shipping and exclusive deals on Amazon, as well as ad-free listening on Amazon Music and unlimited photo storage with Amazon Photos.
Ads in Prime Video content will be introduced in the US, UK, Germany, and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year. Members who opt in for an ad-free experience will pay a monthly fee of $17.98. Disney+ and Netflix are currently charging $13.99 and $15.49 respectively for their ad-free plans.