Amazon announced on Friday that beginning early next year, Prime Video users will experience advertisements during shows and movies, unless they opt for a higher-priced ad-free tier. This move by the tech giant follows a similar approach by streaming rivals Netflix and Walt Disney.
The streaming industry has been grappling with a slowdown in new sign-ups as subscribers, impacted by high inflation and interest rates, curtail spending on entertainment and other discretionary expenses, Reuters news report said.
Amazon revealed that the introduction of advertisements will initially take place in the United States, the UK, Germany, and Canada in early 2024. This will be followed by a rollout in France, Italy, Spain, Mexico, and Australia later in the year.
To cater to users seeking an ad-free experience, Amazon will offer an ad-free subscription tier for an additional $2.99 per month for U.S. Prime members. Currently, a Prime subscription in the U.S. costs $14.99 per month or $139 per year.
The company also noted that live event content, including sports, will still feature advertising even for subscribers on the ad-free plan. Pricing for this new structure in other countries will be shared by Amazon at a later date.
As the streaming landscape evolves, Amazon’s strategic shift aims to balance revenue streams and adapt to changing consumer preferences in the competitive streaming market.