Amazon explores ad-supported tier for Prime Video streaming service

Rachel Brosnahan as Midge Maisel in Season 4 of The Marvelous Mrs. Maisel.(Amazon Studios) Amazon explores ad-supported tier for Prime Video streaming service Wendy Lee June 7, 2023 Amazon is exploring the launch ofoffering an ad-supported plan for its Prime Video streaming service, following a trend led by other rival outlets looking to boost revenue by adding with commercials to their offerings.One option that Amazon The ecommerce giant is considering is bringing ads on Prime Video running ads against its programming whileand offering customers the option to pay more to watch the shows get programs commercial-free and with other features, according people familiar to the Wall Street Journal, citing anonymous sources. No set decision has been made on an ad-supported tier, the Journal said.Amazon declined to comment. Rob Enderle, a principal analyst at advisory services firm Enderle Group, called the discussions it an “additive revenue opportunity.””Advertisers right now, in terms of getting streaming viewers are very limited, because a lot of the streaming viewers are paying a subscription to get away from ads,” Enderle said, adding, advertisers are “more than happy to pay for ads.””They’re going after an audience that doesn’t want to spend as much money for streaming and appears willing to watch ads,” Enderele said. “They want to get that ad revenue as opposed to having to go to somebody else.” If it goes through with the plan, Amazon Prime Video , known for shows including “The Marvelous Mrs. Maisel,” would join a long – list of streaming companies that offer ad-supported options to attract subscribers and retain existing customers.Last year, Netflix launched a cheaper plan with ads, after years of being adverse to advertising on its platform. Disney+ also began offering a plan with commercials, while increasing the price of its standard tier without ads.Amazon has a free, ad-supported streaming service called Amazon Freevee, but Freevee does not contain all the premium content that is on Prime Video. Freevee’s originals include the courtroom prank comedy “Jury Duty.”Advertising is an area of growth for Amazon. The tech giant generated $9.5 billion in advertising services during the first quarter, up 21% from a year earlier. Rob Enderle, a principal analyst at advisory services firm Enderle Group, called the potential ad-supported streaming tier an “additive revenue opportunity.” “They’re going after an audience that doesn’t want to spend as much money for streaming and appears willing to watch ads,” Ender ele said. “They want to get that ad revenue as opposed to having to go to somebody else.”Ross Benes, a principal analyst with Insider Intelligence, said that in recent years Prime Video has “gotten more aggressive” about running promos prior for its other shows ahead of its programming. ad-filled sports broadcasts. “Officially putting ads into Prime Video allows Amazon to centralize its audience and be more consistent with branding,” Benes said. “It wouldnt be surprising if they eventually folded Freevee into Prime Video or shuttered it … It has struggled to stand out in a crowded field of free services. Having one unified streaming service with various tiers would simplify Amazons streaming products for consumers and advertisers.” Additional revenue would help the company pay for its programming. Amazon spent more than $700 million for the first season of “The Lord of the Rings: The Rings of Power,” including buying the TV rights, according to people familiar with the situation.Times staff writer Meg James contributed to this report.