Amazon.com Inc. (NASDAQ:AMZN) revealed its intention on Friday to incorporate advertising into its Prime Video streaming service in 2024, a strategy that aligns with the industry's trend of leveraging ads for additional revenue. The company announced that the advertising would be initially introduced in the U.S., U.K., Germany, and Canada, with other markets to follow in due course.
The tech giant also plans to offer an ad-free option for U.S. Prime members at an additional cost of $2.99 per month. The pricing structure for other countries will be defined at a later date.
According to Amazon's statement, the number of advertisements on its platform will be significantly fewer than those on linear TV and other online streaming providers. The ad-supported Prime Video in the U.S. will cost $14.99 per month or $139 annually, which includes the standard Prime membership fee, plus an extra $2.99 per month for ad-free streaming. This price is exclusive of any discount offers.
In comparison, Netflix Inc.'s (NASDAQ:NASDAQ:NFLX) subscription plans include a $6.99 per month ad-supported plan, a $15.49 ad-free standard plan, and a premium plan priced at $19.99 that provides more simultaneous streams and improved video quality.
Following Amazon's announcement on Friday, the company's shares saw a 1.4% increase in premarket trading, climbing to $131.11 per share. Concurrently, Netflix shares experienced a slight rise of 0.5%.
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