Amazon has announced that starting January 2023, its Prime Video service will display advertisements for the non-paying base to boost investments in original content. This new business model aims at striking balance between huge libraries and ever-rising production budgets to draw wider audiences.
Initially, users in the US, UK, Germany and Canada will witness ads in shows and movies. France, Italy, Spain, Australia follow later this year as Amazon evaluates reception and iteration requirements in staged phases across markets.
Seeks to Maintain Competitive Pricing
The strategic shift only applies to base Amazon Prime members who avail the video service bundled under overall membership without extra fees. Those not wanting ads can opt for a standalone $2.99 monthly subscription in the US, keeping the core Prime package unchanged in 2024.
Global pricing plans will emerge subsequently. But indications are that Amazon wants to prevent hiking baseline Prime rates to drive adoption by mass retention through a differentiated video-only premium tier for ad-free experience.
Prime Video Key to Wider Offering
The announcement led some current subscribers to complain about ads arriving on Prime Video in some form when promised otherwise earlier. But Amazon noted that despite this evolution, overall value of the full Amazon Prime offering remains unmatched.
Alongside free express shipping, Prime’s benefits encompass everything from exclusive member deals, Prime Day privileges, free podcasts, music and books access to healthcare savings – which will continue improving.
The goal is upholding Prime’s appeal via ongoing enhancement while tackling video cost economics separately. With stiff competition, Amazon is strategizing to pump more high-quality content in coming years, hence the commercial rejig to support investments sustainably.
