Amazon is gearing up to introduce more advertisements to its Prime Video service in 2025, following an earlier rollout of ads to the platform. Despite initial concerns about customer backlash, Amazon reports that subscriber churn has been much lower than anticipated, encouraging the company to explore further monetization through ad-supported streaming.
More Ads, but still fewer than competitors
Amazon first began incorporating ads before shows but avoided interrupting programs with ads, unlike many of its streaming competitors. Kelly Day, Amazon’s Vice President of Prime Video International, confirmed that the company plans to increase its ad load in 2025. However, Amazon assures viewers that the volume of ads will remain lower than those found on traditional TV and rival streaming services like Netflix, Disney+, and Paramount+.
This approach has seemingly worked in Amazon’s favor. “We know it was a bit of a contrarian approach,” Day explained, “But it’s actually gone much better than we even anticipated.” The company believes its “gentle entry” into advertising has not only met but exceeded customer expectations, contributing to the lower-than-expected churn rates.
Why more ads?
The answer is straightforward: revenue. As production costs for original content continue to rise, subscription fees alone are proving insufficient to maintain profitability for streaming services. With a global audience of approximately 200 million viewers, Amazon sees significant potential in ramping up its advertising. Notably, more than half of these viewers are in the United States, making Prime Video a highly attractive platform for advertisers.
In an effort to distinguish its ad offerings, Amazon plans to introduce “shoppable” ads that allow viewers to add products to their Amazon shopping carts without leaving their current show. This unique approach could convert advertising directly into sales, leveraging Amazon’s existing retail platform in ways that competitors cannot.
Positive reception and future content plans
Amazon automatically switched its global subscriber base to the ad-supported model, allowing customers to opt out by paying extra for an ad-free experience. While Day declined to disclose how many subscribers upgraded to the ad-free tier, she suggested that the figure was lower than some analysts’ estimates of 20%.
In addition to increasing ad slots, Amazon continues to invest in new content, including live sports and original series like “Fallout.” Live news coverage of significant events, such as the U.S. elections, is also on the horizon. This expanded content strategy aligns with the company’s ongoing efforts to keep viewers engaged, thereby maintaining subscriber numbers as the volume of ads increases.
