Priyanka Chopra Jonas as Nadia Sinh on Amazon Prime Video series "Citadel"

Watch as Amazon Prime Video enters the advertising layer frenzy

Amazon Prime Video, welcome to the party. You’re a little late, but there might be some cauliflower left on the veggie plate. (Probably no ranch dressing, though.)

Amazon’s main subscription video service, Prime Video, plans to launch an ad-supported tier, the The Wall Street Journal reports it Wednesday, just like Netflix and Disney+ did in late 2022. (And HBO Max, now Max, before them, etc.)

Conversations within Amazon are in their “early stages” and have surfaced “in recent weeks,” the newspaper wrote, warning that plans may not yet materialize. But – and this part is purely taken from IndieWire – they almost certainly will.

Amazon is also in talks with premium video competitors Warner Bros. Discovery and Paramount to add ad-supported tiers of Max and Paramount+ to its Prime Video channels, according to the Journal. Users can currently sign up for and view ad-free versions of Max and Paramount+ through Prime Video Channels, which is a popular gateway to third-party streaming apps. The ad-supported Paramount+, officially known as the “Essential” tier, is available now on Roku.

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In the future, Prime Video channels (or, again, Roku – or both!) could become a hub for true streamer aggregation in one package. Warner Bros. Discovery chairman and CEO David Zaslav recently said he believes that will happen, and he said he agrees. . It is ahead of the same position within the streaming ecosystem.)

What do you say, Amazon? “We do not comment on rumors or speculation,” a spokesperson replied when he was reached by IndieWire for comment on the WSJ story. Dynamite stuff.

Max/Warner Bros. Discovery spokespersons did not respond to our intervention.

KANSAS CITY, MO - SEPTEMBER 15: Photo from Week 2 of the Amazon Thursday Night Football game between the Kansas City Chiefs and the San Diego Chargers at Arrowhead Stadium on September 15, 2022 in Kansas City, Missouri.  (Photo by Jason Hanna/Amazon Sports)
A 2022 Amazon “Thursday Night Football” game between the Kansas City Chiefs and the San Diego Chargers at Arrowhead Stadium.Jason Hanna – Amazon Sports

Already, an Amazon Prime Video tier with TV commercials feels natural with its “Thursday Night Football” games, a few Yankees games in the New York market, and live award shows, which have a natural commercial pace (and yes, commercials ). While the expensive NFL package has produced some lackluster games and unimpressive TV ratings to date, it has provided a pretty smooth user experience from a technical standpoint. Netflix still can’t say the same.

Until now, Amazon Prime Video advertising on regular programming has been pretty much limited to spots for other Amazon Prime Video movies and shows.

Amazon Prime Video and Apple TV+ were the last two ad holdouts in the streaming war. It is probably no coincidence that the two largest listed companies in the world (by market capitalization: Apple is No. 1 and Amazon is No. 2) maintain their position: they are the only ones who can afford it.

Both have ad-supported cousins. Amazon’s FAST (ad-supported free streaming television) service Freevee, formerly IMDb TV, is fully ad-supported. The Apple TV+ derivative MLS Season Pass, which has all Major League Soccer games and can be a standalone subscription or an add-on, has ads. This is how sport works: the athletes need a break and the platform that pays for the expensive royalties needs sponsorship. Amazon is considered among the likely landing spots for an NBA package in the near future.

If video streaming seems like an afterthought for Amazon and Apple, well, it is. The former makes real money on everyday household items, and the latter banks through its smartphones.

Man with credit card and shopping at online store on laptop
Man with credit card and shopping at online store on laptopGetty Images/iStockphoto

Like streaming, retail has been hit hard by macroeconomic struggles. For Amazon, growing an already large advertising revenue stream by adding streaming video would complement its overall cost-cutting efforts, which have already led to tens of thousands of staff layoffs.

In the first quarter of 2023, Amazon’s advertising services had sales of $9.5 billion, up 23% from the same quarter in 2022. This makes advertising services Amazon’s fastest growing revenue stream. (The dollar amount is in line with subscription services revenue of nearly $9.7 billion.)

“Our advertising business continues to experience robust growth, largely due to our continued investment in machine learning that helps customers see relevant information when they engage with us, which in turn delivers unusually strong results for brands. Amazon CEO Andy Jassy said in a prepared comment. accompanying the first quarter financial results.

Amazon’s ad-supported streaming landscape reaches an average monthly audience of over 155 million viewers, Amazon shared with IndieWire. In addition to Freevee and its live Prime Video programming, Amazon also sells advertising on Twitch and Fire TV channels. The company also receives advertising from the third-party apps it hosts on Prime Video channels.

Prime Video is part of Amazon Prime, which costs $14.99 a month and includes other amenities, most notably free two-day shipping on the e-commerce site’s retail items. Alternatively, you can sign up for Prime Video as a standalone service for $8.99 a month.