Amazon becomes Prime commercial space

Amazon Prime Video launches commercials

Together with

The Future. Amazon announced Prime will get limited ads starting in early 2024 — “meaningfully fewer” than linear TV, stresses the company. The new ad tier is part of an industry-wide shift toward ad-supported services. But for Amazon, the model could be extra lucrative. Amazon’s ad business is not only one of the company’s fastest-growing sectors, but users may also be able to navigate right from an ad to a product listing — all within the Amazon ecosystem.

New normal
Amazon Prime Video is getting commercial breaks.

While we can quibble on Amazon needing more money to invest in content (it has a $1.33 trillion market cap), the move is a microcosm for how important advertising has become to streaming (and how much pressure new CEO Andy Jassy is putting on Prime to justify costs).

In the quest to chase Netflix, Hollywood realized streaming isn’t as profitable as traditional TV or theatrical releases (hello, strikes). So, every streamer from Disney+ to Max is nudging users toward their cheaper, ad-supported tiers. The average revenue per user (ARPU) is simply higher when advertisers subsidize content.

The new model is starting to look very much like the old model.


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