Streaming ads went beyond testing

Prime Video knows advertising is lucrative.

Ads are becoming a standard feature of streaming platforms. It was once taboo because the customer pays for the service, but high costs and the strategy of opening new tiers with higher prices and no advertising are making ads a new currency for platforms.

Same people. Prime Video told the Financial Times that it has not seen a drop in subscriptions since it began including advertising eight months ago, similar to Netflix, which has not seen account cancellations since raising prices, cancelling shared accounts, and advertising in programming.

More ads. Kelly Day, vice president of Prime Video International, told the outlet that the platform would increase advertising slots in 2025. In blocks of two or three spots, ads start and interrupt films and series. According to Day, the ads have been “very light,” a “soft entrance into advertising that has exceeded customers’ expectations of what the advertising experience would be like.”

200 million ad viewers. This is the number Amazon sells globally, which is complicated because not all customers with an Amazon Prime account, which includes Prime Video, are viewers of the platform. The company informs advertisers of that number, half of them in the US, as potential spot targets.

Interactive ads. Prime Video is confident that more people will pay the €1.95 to opt out of ads (an option available since April) and is also improving its ads.

Interactive, shoppable ads on Prime Video could let viewers add items to their Amazon basket or learn about brands without leaving the streaming service. Amazon can maximise these capabilities with the store integrated into its business.

Everyone tries. Netflix was the first to try this disguised price increase (since, unlike Prime Video, Netflix emphasises ad-free rates), and it did well. Disney+ or Max advertised it beforehand. They all changed their rates at the start of the year, but Prime Video resisted advertising the most. Netflix has more subscribers than ever and Amazon reported $12.8 billion in advertising revenue in Q2 2024. Advertising is here to stay.

This week, Amazon Prime Video vice president of advertising Kelly Day told the Financial Times that the company will increase ad loads in 2025 to meet rising demand.

Day called Prime Video’s January ad rollout a “gentle entry” to test consumer reactions, saying the lack of mid-content ad breaks created a “very light ad load.”

From the inside, Prime Video’s ad rollout has been successful. Amazon’s revenue growth and nearly $2 billion in advertising commitments are driven by our prediction that 80% of US Prime Video viewers watch with ads. Day’s comments reveal Amazon’s internal perspective on the effort.

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