Amazon is preparing to follow in the footsteps of Netflix and Disney+ by introducing advertising into its Prime Video streaming service. But it will be mandatory in the basic offer and you will have to pay extra to avoid it!
The days of ad-free video streaming seem to be over. Or almost. What was originally a strong argument for subscribing to these new SVOD (subscription video on demand) services, particularly for Netflix, which made it a key asset to convince its customers, is in the process of becoming a privilege. And a paid privilege, of course, which completely changes the situation.
The explanation is simple, just as the evolution was predictable. After a period of conquest, where each new player was ready to take money to acquire market share, the sirens of profitability sounded, calling to order the platforms which now seek to garner maximum income , even if it means going back on their initial promises. Consequence: SVOD services have, on the one hand, increased their prices, while introducing advertising into certain packages.
It all started with Netflix, the pioneer, which last year launched an Essential offer with advertising at a very attractive price (€5.99 per month). An offer that has since improved, while the platform increased the prices of its other plans. To the point of becoming the basic subscription, the classic formula now being well hidden… For its part, Disney++ has decided to follow suit by offering since 1er November a new formula with advertising in order to make up for the deficit of its streaming service (see our article).
Prime Video: streaming with advertising, like other platforms
It is therefore without great surprise that we learned in June 2023, through The Wall Street Journal, that their competitor Amazon was seriously considering also launching a version of its Prime Video streaming service with advertising, in order to align with them and be more profitable. And, according to information from NPA Consultingadvertising spots will indeed appear on the American giant’s SVOD service: first in the United States, Canada, Germany and the United Kingdom at the very beginning of 2024, then in France and in other countries. other countries a little later, from April 10.
As a reminder, the subscription to Amazon Prime – which therefore gives access to Prime Video – costs €6.99 per month or €69.90 per year – not counting Prime Student, which is €3.49 per month and 34. €95 per year. It is possible to add “options” for a fee, such as the Warner Pass – which notably gives access to the HBO catalog until the end of 2024 – for an extra €9.99 per month. It also provides access to free and priority deliveries on the e-commerce platform, Prime Music, Prime Reading, Prime Gaming and Amazon Luna. Lower prices than its competitors for a much more complete offer.
Initially, according to several sources, Amazon was considering several ways to incorporate advertising into its streaming service. The first option was to create an ad-only plan giving access to Prime Video at a more reasonable price. A way to conquer a new audience, with a more “affordable” subscription, to collect money from advertisers, but also to provide a gateway to attract customers to the Prime formula, which triggers a “reflex” among subscribers. ” purchasing on the e-commerce platform – even if it means consuming unnecessarily.
The other avenue explored was the integration of advertising into the current subscription and the creation of a more expensive subscription, which would be without it. A bit like what Disney+ did. Amazon would also have had discussions with Warner Bros., Discovery and Paramount for this formula to be integrated into the Prime Video Channels channels – which allows you to subscribe to certain channels for an additional fee and to streaming services like Max and Paramount+ in going directly through the application.
Prime Video: advertising as standard and at the same price!
Ultimately, Jeff Bezos seems to have opted for the second option: putting advertising by default and asking for an additional fee, more precisely $2.99 per month, to remove it. The ad would only be visible in series and films produced by Amazon – initially at least –, for a maximum duration of 3.5 minutes. In total, this would therefore make an ad-free formula at just under 10 euros per month, which remains advantageous compared to the prices of its competitors – €10.99 minimum for Netflix and €8.99 for Disney+ – and the multitude additional services it includes.
The creation of an advertising component should help Amazon cover the costs of creating its original productions. In February, Chief Financial Officer Brian Olsavsky revealed that Amazon spent about $7 billion in 2022 on Amazon original programming, live sports programming and third-party licensed video content. Just obtaining the rights to create the series The Lord of the Rings cost $250 million – ultimately receiving a fairly lukewarm reception.
But the e-commerce giant is no novice when it comes to advertising. It already offers Freeve, a free streaming service financed by advertising – but it is not available in France -, and broadcasts half-time announcements in the Ligue 11 Pass. Not to mention that certain broadcasts do not go there no slack on product placement! According to The Wall Street Journal, the company’s advertising revenue was $9.5 billion in the first quarter, up 21% from a year earlier. According to NPA Conseil, future advertising, even limited, would represent 50 million euros in turnover for the first year – 110 million if the entire catalog was affected.