Ads as a revenue stream
Despite Prime members already paying a monthly fee, Amazon has found success in generating additional revenue through ads. The company recently announced exceeding its advertising targets, with over $1.8 billion in commitments at a September upfront event. The ad-supported tier of Prime Video boasts a substantial user base, reaching 19 million monthly users in the UK and over 100 million in the US.
A “gentle entry” into advertising
Kelly Day, vice-president of Prime Video International, acknowledged the company’s initial approach to ads was a “gentle entry,” deliberately starting with a “very light load” to acclimate viewers. This strategy appears to have paid off, as Amazon hasn’t seen a significant increase in cancellations or churn after introducing ads.
We know it was a bit of a contrarian approach to take, but it’s actually gone much better than we even anticipated.
Kelly Day, VP of Prime Video International
Interactive ads and the future of streaming
Amazon is also developing interactive ads that will allow Prime Video viewers to add products to their shopping carts directly from the streaming platform. This feature will be available for both physical remotes and the Prime Video app.It seems that ads are here to stay on streaming platforms. As consumers, we’re increasingly faced with the choice of either paying a premium for ad-free experiences or enduring a growing number of ads interrupting our viewing. Personally, as a tech enthusiast and consumer, I find this trend concerning.
While I understand the need for streaming services to generate revenue, the increasing prevalence of ads can negatively impact the viewing experience. It also raises questions about the value proposition of subscription services if ads are still present, and further illustrates the importance of consumers making their opinions known via their wallets. Moving forward, it will be interesting to see how Amazon and other streaming platforms balance their need for revenue with the desire to provide a seamless and enjoyable viewing experience for their subscribers.
