Amazon (NASDAQ:AMZN) Prime Video is set to start broadcasting advertisements during its shows and movies from early 2024, according to a company announcement on Friday. Initially, the ad integration will be introduced in the U.S., U.K., Germany, and Canada, with France, Italy, Spain, Mexico, and Australia following later in the year. The move comes as part of Amazon's strategy to sustain investment in high-quality content amid intense competition among streaming platforms.
Prime subscribers in the U.S. will be given the choice to maintain an ad-free service for an additional $2.99 per month. The pricing for ad-free programming in countries outside the U.S. will be disclosed at a later date. Amazon has confirmed that there are no plans to change the price of Prime membership next year.
The decision by Amazon follows a trend set by other streaming platforms diversifying their subscription levels to balance fresh content generation and subscriber retention against potential losses due to price increases. For instance, Disney intends to launch a $13.99 monthly subscription for its ad-free Disney+ service starting mid-October in the U.S., a 75% increase from its ad-supported tier. Netflix (NASDAQ:NFLX)'s ad-free plan is currently priced at $15.49 per month, over double the cost of its ad-inclusive subscription.
Before introducing advertisements into its programming, Amazon plans to notify U.S. Prime members several weeks in advance via email, offering information on how to opt for the ad-free service if desired.
Despite these changes, live events on Amazon Prime, such as sports already feature advertising. The limited advertisements during shows and movies starting next year are part of a broader strategy to facilitate continued investment in high-quality content.
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