Amazon will increase the number of ads on its Prime Video streaming service for its most popular television shows and films next year, as it intensifies its push to monetize its services. The company claimed that it has not seen a dramatic drop in subscribers after it added advertising on its Prime Video platform 8 months ago. This eased executives’ fears of a backlash from customers as they try to attract more brands to their streaming service.
Kelly Day, Vice-President of Prime Video International who oversees streaming video in global markets told that there will be more ad slots available for brands in 2025. Day, speaking ahead of the first London “upfront” scheduled for Wednesday evening — where television companies show their plans to advertiser to get money in the coming year — said that its “load” of advertising would “ramp up” a bit more until 2025.
Amazon has entered a highly-competitive market of ad supported streaming services. Netflix, Max and Paramount+ have all introduced an ad supported tier that is cheaper than subscriptions without ads. Amazon will attempt to attract advertisers on Wednesday with data that shows it can reach almost a third (or 19mn) of British citizens monthly. Overall, Amazon claimed to have a global advertising reach of around 200mn — which is the average monthly viewers of Prime Video supported by ads — with over half of them in the US.
Day stated that Prime Video deliberately launched this year with “very little advertising” — no ads in the middle or at the end of programmes — which was a “gentle introduction into advertising, that exceeded customer expectations regarding the ad experiences”.
The ecommerce company automatically switched its 200mn global subscribers over to its ad supported service, unless the customers actively paid more for premium ad free service. Day: “We understand that it was somewhat of a counter-intuitive approach from us to the things we were doing. But. . . It’s actually been much better than expected.”
She also said that the “churn”, when a Prime customer leaves, had been “much, much less than anticipated. . . We haven’t seen many people canceling or churning”.
Day did not reveal how many customers have upgraded to the ad-free level, but it said that this figure was lower than some analysts’ estimates of 20%.
Amazon will launch interactive “shoppable’ ad formats on Prime Video. Viewers can add items to their shopping cart or find out more about brands by scanning their mobile devices or clicking on their remote control. They will not have to leave the streaming service to do this. Analysts and rivals believe that Amazon has a unique ability to convert its advertising into sales through its retail platform.
In recent years, ads have grown to be a highly profitable and fast-growing source of revenue for Amazon. Amazon’s digital advertising revenues grew by a fifth, to $12.8bn in the second quarter 2024. Some production companies are concerned that streaming service has cut back on spending on new shows after an initial outlay as they competed to grow their subscriber base.
Day confirmed that Amazon has increased its spending on Prime content, and in particular on rights to live sports. Day confirmed that live coverage of the US elections would be provided, as well as live sports such as Thursday Night Football and music events.
She said that viewing numbers also increased in this year due to original content like Mr & Mrs Smith and Road House. She said that there will be a number of exciting new shows in the coming year, including Fallout’s next series and movies featuring Will Ferrell and Reese Witherspoon.
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