Subscribers to Prime Video's ad tier will start seeing more commercials next year, further testing how much advertising streamers will tolerate.
Speaking to the Financial Times today, Kelly Day, VP of Prime Video International, said that Amazon will offer more Prime Video ad slots to advertisers next year. She didn't get into specifics but confirmed that Prime Video's ad load would "ramp up a little bit more into 2025."
In January, when Amazon launched Prime Video's ad tier, The Wall Street Journal reported that subscribers would see an average of between two and three-and-a-half minutes of ads per hour. Day told FT today that upon launch, Prime Video with ads was given a "very light ad load," providing subscribers “gentle entry into advertising that has exceeded customers expectations in terms of what the ad experience would be like." The executive pointed out that Prime Video with ads doesn't show commercials in the middle of content. That could change next year.
Amazon is also adding shoppable ads to Prime Video in 2025, FT confirmed. The new ad format, which includes carousel ads, pause ads, and brand trivia ads—is being sold to advertisers as a new way to attract TV and movie viewing audiences that have become more elusive in the streaming age.
Ads haven't hurt Prime Video business so far
According to Day, subscriber churn in response to the ads has "been much, much less than we anticipated."
Amazon says Prime Video has 200 million monthly viewers and that subscriber count hasn't dropped dramatically since it got ads. Similarly, market research firm Antenna told FT in July that a substantial amount of Prime Video subscribers opted out of ads initially, but that number soon "trailed off." By May, fewer than a 10th of subscribers were paying for an ad-free subscription, Antenna said.
Prime Video not a big part of Amazon's ad business yet
For a while, streaming was viewed as the ad-free alternative to cable. However, with streaming services more focused on turning subscriber counts into profits, the companies are increasingly relying on ads. Streaming services say they make more revenue per user on average if the subscriber uses an ad tier. Meanwhile, increasing costs for streaming subscriptions are pushing viewers to look for ways to save money.