Amazon Prime Video is more than just a perk of a Prime membership – Amazon is expanding the streaming service to become a standalone platform.
According to Prime Video head Mike Hopkins, Jeff Bezos saw Prime Video as an opportunity to create a media company rather than just an extension of Prime.
Over the past four years, Amazon has been working towards this goal. In January, Prime Video became the largest ad-supported streaming service in the U.S., reaching 115 million subscribers. The service now offers ad-supported content by default, with an option to pay an additional $2.99 per month for an ad-free experience as part of the $14.99 per month Prime membership.
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Only 15% of subscribers chose the ad-free viewing option, showing that most users prefer the ad-supported model. The introduction of ads did not affect Amazon’s subscriber count, according to a Hub survey, and is expected to generate $1.3 billion in ad revenue this year and $2.3 billion next year, as projected by MoffettNathanson.
“Overnight, Amazon Prime Video has significantly impacted the video advertising industry,” said Mark Loughney, a senior consultant at Hub. Jeff Bezos. (Photo by Emma McIntyre/Getty Images)
Amazon presented the shift to ads as a way to continue expanding Prime Video. Amazon MGM Studios had a successful year in 2023, with 68 Emmy nominations for original content like “The Marvelous Mrs. Maisel.”
According to Nielsen’s June TV and streaming report, Prime Video ranks below Netflix and YouTube but ahead of Hulu, Disney+, and Peacock. The original series The Boys gained 4 billion viewing minutes in June.
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