Don’t get too used to watching your Amazon Prime content commercial-free. According to a report in the Wall Street Journal, the company is considering adding an ad tier to its streaming service.
Amazon is looking for ways to boost revenue in its entertainment business, which has seen better days. Earlier this year, the online giant initiated the most extensive layoffs in the company’s history.
Amazon isn’t alone in its streaming woes. The industry has been facing a slowdown for months, as new signups are down and consumers are cutting service due to economic challenges.
Amazon also isn’t the only streamer considering ad-tier models. Hulu, Netflix, and Disney have all gone down this path.
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Why ads?
Amazon’s ad revenue has been a bright spot in an otherwise dreary economic landscape. Ad revenue grew to $9.5 billion in the first quarter, up 21% yearly, causing executives to be more bullish about building that sector of their business.
In addition, WSJ reports that advertisers are hungry to access Amazon’s premium movies and programs, such as The Marvelous Mrs. Maisal and the James Bond flick No Time Die.
Meanwhile, Amazon is in talks with Warner Bros. Discovery and Paramount Global to add the ad-supported tiers of their streaming services to Prime Video Channels. This would allow users to subscribe to these services through Prime Video and watch their content through the Prime Video app. Currently, users can subscribe to the ad-free versions of Max and Paramount+ through Prime Video Channels.
The discussions are still in the early stages, and it is unclear when or if ads will actually appear on Prime Video. But if they do, it would be a significant move for Amazon as it seeks to expand its streaming business.
