Amazon plans to introduce more advertising on its Prime Video platform in 2025 as part of its push into the ad-supported streaming market. Over the past eight months, Prime Video has added ads, and despite initial concerns about losing subscribers, the company has not seen any major declines. By gradually increasing the number of ads, Amazon aims to attract more advertisers without alienating its audience. This strategy is in line with other streaming services like Netflix and Disney+, which offer ad-supported tiers at a lower price while still providing the option of ad-free content at a higher cost.

Why is Amazon increasing advertising?

Amazon’s shift toward more ads in Prime Video is about generating additional revenue from advertisers. With the rise of ad-supported streaming platforms like Netflix, Disney+, and Paramount+, Amazon is now competing more aggressively in this space. Many streaming services offer ad-supported tiers as a cheaper alternative to ad-free subscriptions, and Amazon has been part of this trend.

The company sees advertising as a huge growth opportunity. According to Kelly Day, vice president of Prime Video International, Amazon has had success since introducing advertising to Prime Video eight months ago. Despite initial concerns that users were unhappy with the ads, Amazon has not experienced a significant decline in customers. In fact, they have found that most viewers agree with the “lighter advertising load” introduced so far, which means fewer and less intrusive advertisements, such as avoiding breaks in the middle of the program.

Amazon’s unique position as an e-commerce giant gives it a special advantage in the advertising arena. It can create “shoppable” ads, where viewers can buy items or learn more about a brand with a click of their remote or phone. This is different from traditional TV commercials and can make commercials on Prime Video more interactive and useful for viewers.

Will more ads impact the user base?

One of the biggest concerns regarding adding more ads is the potential for user backlash. People generally don’t like ads, especially if they’re paying for a service. However, Amazon has been cautious in its approach to releasing ads. By keeping the ad experience “light” in the beginning and gradually increasing the number of ads, they have managed to avoid annoying a large portion of their user base. Day noted that “churn”, or the rate at which customers cancel their subscriptions, has been much lower than expected.

For users who really dislike ads, Amazon offers the option to pay more for an ad-free experience. So far, fewer users than expected have chosen this expensive tier, which suggests that most are willing to tolerate some ads in exchange for the regular subscription price.

When will more ads start?

The increase in ads on Prime Video is set to start gradually, with ad loads increasing more significantly in 2025. The timing is in line with Amazon’s broader strategy to expand its advertising capabilities and attract more advertisers to its platform. The upcoming changes were presented during Amazon’s “Up Front” event in London, where the company unveiled its plans for the coming year to advertisers.

What’s next for Prime Video?

In addition to growing ad presence, Amazon has big plans for Prime Video content. The company continues to invest heavily in original programming and live events such as sports and music. Shows like Fallout and Rings of Power, as well as movies starring big names like Will Ferrell and Reese Witherspoon, are set to attract audiences. Live sports, particularly the NFL’s Thursday Night Football, will also remain a core part of the Prime Video offering.
In conclusion, while ads will become a bigger part of Prime Video, Amazon is taking steps to ensure that the user experience is not overly disrupted. With the option of ad-free subscriptions and a constant flow of new content, it’s likely that most users will stick around despite the increase in ads.
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