Amazon Prime Video has significantly changed its advertising strategy by doubling the number of ads shown per hour to viewers. Initially, when ads were introduced in January 2024, Prime Video featured up to 3.5 minutes of ads per hour. Now, this ad load has increased to between 4 and 6 minutes per hour. Originally, Amazon Prime subscribers paid annually but in late 2023, it introduced an ad-free experience for an additional amount per month aligning with the industry trends of other streaming services who also offer cheaper, ad-supported subscriptions.

Background on Prime Video’s Ad Model

Originally, Prime Video was ad-free for Amazon Prime subscribers, who paid $159 annually or $15 monthly. In late 2023, Amazon announced that avoiding ads would require an additional $3 monthly fee, effectively creating an ad-supported basic tier that also lacks premium features like Dolby Atmos and Dolby Vision. This move was part of a broader industry trend where streaming services such as Netflix, Max, Peacock, and Paramount+ also offer cheaper, ad-supported subscriptions. Even Apple TV+ is reportedly preparing to enter this space.

Industry Context and User Impact

Compared to traditional broadcast TV, which typically has 13 to 16 minutes of ads per hour, Prime Video’s new ad load remains relatively light. However, the doubling of ads could still impact the user experience. Advertisers are closely monitoring this change to see if it affects viewer tolerance and engagement. Here’s a breakdown of the key points:

  • Prime Video’s ad load: Despite the increase, Prime Video’s ad inventory is still lighter than traditional TV.
  • Advertiser goals: Amazon claims its goal is not just to increase ad volume, but to improve the overall ad experience and maintain a balance between revenue growth and customer satisfaction.

Potential Impact on Advertising:

  • Cost per impression (CPM): The increased ad inventory could lower CPMs, making Prime Video a more attractive option for advertisers, especially in a challenging retail environment where companies are looking for more cost-effective ad solutions.
  • Transparency concerns: Some advertisers express concern over the lack of measurement transparency in Amazon’s ad performance metrics. These metrics are mostly confined within Amazon’s ecosystem, making it difficult to compare performance with other platforms.

What’s Next for Prime Video?

The ad load increase aligns Prime Video with industry norms, placing it in a middle tier among streaming services in terms of ad volume. Amazon’s ongoing enhancements to its ad offerings, including show-level data and private auction deals, suggest a push to become more competitive in the ad-supported streaming market. For viewers, this likely means more ads but potentially at a lower subscription cost or with added features in premium tiers.

Looking ahead, Amazon will need to carefully manage the balance between ad revenue and viewer satisfaction to avoid alienating subscribers. As the streaming market grows more crowded and ad-supported models become standard, Prime Video’s strategy will be a key test of how far consumers will tolerate ads in exchange for lower prices.

Author’s take: 

Amazon’s move to double ads on Prime Video is a calculated risk that could pay off by increasing ad revenue, but it also raises the stakes on user experience. The future success of this approach hinges on Amazon’s ability to keep ads relevant while maintaining competitive pricing.