Amazon is planning ad breaks for Prime Video. Amazon Prime Video viewers of landmark series such as “The Boys” and “The Marvellous Mrs. Maisel” will soon have access to something never before available on the service: television advertisements.
Amazon Prime Video, one of the last primary streaming services to eschew the injection of regular commercial breaks into its films and programs, will begin allowing them to run in early 2019. Amazon joins several other streaming hubs — including Disney+, Netflix, and Warner Bros. Discovery’s Max — that offer ad-supported tiers, which implies the world of streaming may soon resemble the world of traditional television.
Tim Hanlon, CEO of the media-industry consulting firm Vertere Group, asserts that the television industry has never fully controlled its aggressive monetization practices.
According to the company, Amazon Prime Video will feature fewer advertisements than traditional broadcasters or broadband competitors. Four minutes per hour is the minimum advertising time on a streaming platform. In 2024, advertisements will debut in the United States, United Kingdom, Germany, and Canada, followed by France, Italy, Spain, Mexico, and Australia later. Those who wish to retain Amazon Prime Video ad-free can continue to do so for an additional $2.99 per month in the U.S. on top of the annual Amazon Prime subscription.
Amazon declined to make executives available for comment.
Companies ranging from NBCUniversal to Apple have rushed to make comedies, dramas, and sports available to individuals who no longer watch traditional broadcast and cable television. Nevertheless, doing so is expensive, necessitating millions of dollars in content and infrastructure expenses — all while new competitors enter the market. Initially, Wall Street encouraged companies such as Paramount Global and Fox Corp. to pursue Netflix, Amazon Prime Video, and Disney’s Hulu. Now, investors are demanding timelines for when all activities will generate a profit.
Even the most resistant broadcasters have succumbed to this pressure and embraced advertising. Netflix executives have insisted for years that the service will never rely on advertisements. Earlier in the year, the company intended to stage a lavish presentation during the TV industry’s annual “upfront” week, during which networks negotiate with Madison Avenue.
Amazon stated that the decision to broadcast advertisements during Prime Video selections would allow the company to “continue investing in compelling content and increase that investment over time.” In addition to paying millions for “Thursday Night Football rights,” Amazon purchased MGM Studios for $8.5 billion in May of 2021. Throughout the years, it has introduced premium series such as “The Lord of the Rings: The Rings of Power,” “Tom Clancy’s Jack Ryan,” and “The Wheel of Time.”
Large media companies such as CBS and Disney have prospered for decades on advertising and subscription fees from cable and satellite providers. Streaming services, many of which are launched with few or no advertisements, eliminate a significant source of revenue.
Hanlon states, “It’s a lesson we all learned in the 1990s when cable came into its own.” “The most beautiful business model is in the media, where you get paid for subscribers and advertising.”
Amazon runs advertisements elsewhere. Its Freevee service does not require a subscription and allows users to watch films and television series in exchange for viewing ads that tend to interrupt content at irregular times. In addition, the corporation seeks advertising support for its weekly broadcast of “Thursday Night Football.” Additionally, the company has introduced new commercial formats in areas such as its Amazon Fire broadband service. Some advertisements couple sponsors with movie suggestions, while others permit subscribers to make immediate e-commerce purchases.
As a result of Amazon’s decision, few, if any, of the nation’s primary streaming services reject ads categorically. Apple TV+ scripted programs and features do not contain advertisements.
Introducing a small number of advertisements to streaming services may soon inspire concerns that the major media corporations will continue to add more advertisements, as they have on television networks. “The relatively small ad loads we see in premium streaming today are probably as good as it gets,” Hanlon says. He anticipates that advertisements in streaming environments will “become more prominent” over time, with larger ad loads per interval and “more opportunities to squeeze in ad messaging along the way, particularly if consumers perceive it as a cost-saver.”
According to the executive, most media and content platforms have adopted at least some form of advertising, and the companies that operate such operations will need to regulate the flow of commercials lest consumers perceive streaming to be as ad-heavy as traditional television networks. “I’m not certain that advertising solves all problems,” he states. “It could potentially make some of them worse.”