“The Boys” and “Reacher” will soon be selling soap — just like traditional broadcast television.
Amazon said it will start running ads on its Prime Video streaming service on Jan. 29, officially ending the promise of its 2011 launch of providing commercial free streaming to its customers.
The company began sending out emails to subscribers Tuesday explaining that it will become the latest streamer to inject ads into its programming, catching up to rivals as they chase ways to squeeze profit from the services.
The move was expected — the company pointed to early 2024 for the launch of the ad-supported tier back in September, after hinting it would launch ads in June.
Bringing its 200 million subscribers into the advertising market could mean a revenue stream approaching $5 billion a year — but it could also further weaken a market already flooded with space to fill, which has caused ad prices to drop sharply in the past year.
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Amazon also followed streaming rivals in offering an ad-free version at a higher price.
Prime Video is somewhat different than pure-play streamers like Netflix, in that most subscribers are also signed up for the company’s shipping services. The complete Prime service will remain at its current $14.99 per month, or $139 a year. Subscribers who register for the ad-free version of the video service will pay an additional $2.99 per month.
A membership that only includes Prime Video and none of the shipping benefits is $8.99 a month. A standalone ad-free subscription will cost $11.99 per month.
The announcement comes amid widespread price hikes among streamers in the past year, even as the number of services proliferate. Last month, Disney pushed up prices for ad-free Hulu by 20% and Disney+ by 27%.
Amazon also operates Freevee, a free ad-supported streamer. Tuesday’s email to customers said that “live event content such as sports, and content offered through Amazon Freevee will continue to include advertising.”
Amazon said it aims to have fewer ads than linear TV and other streaming TV providers.
