Amazon is reportedly planning to launch an advertising-supported tier of its streaming platform ‘Prime Video’ as it aims to expand its ad business and increase revenue from entertainment.
According to The Wall Street Journal, citing sources, the discussions are still “in the early stages” and have been ongoing for a few weeks.
Currently, Amazon provides Prime Video as a standalone subscription for $8.99 per month or as part of its $14.99 per month Prime membership.
People familiar with the situation said that the company is considering a number of ways for how it can integrate advertisements into Prime Video.
One choice would be to offer more advertising to current Prime users and give them the choice to pay extra for an ad-free alternative and other advantages.
Recently, Amazon has adopted the following strategy with its Music service — More songs were made available to Prime subscribers at no extra cost, but the opportunity to download most songs was removed in exchange for a pricier upgrade.
“Creating an ad tier would help Amazon cover the costs of creating its shows and movies”, the report said.
In February, Amazon’s chief financial officer, Brian Olsavsky, stated that the company spent around $7 billion last year on Amazon Originals, live sports programming, and licensed third-party video content offered as part of Prime.
