Amazon Prime Video is no longer just a perk of a Prime membership – it’s evolving into a standalone streaming service in its own right. Jeff Bezos recognized the potential to create a media empire with Prime Video, rather than simply an extension of Prime, according to Prime Video head Mike Hopkins in a recent interview with Reuters.
Over the past four years, Amazon has been working towards this goal. Prime Video became the largest ad-supported streaming service in the U.S. earlier this year, catering to its 115 million U.S. subscribers. While the service originally came ad-free with the $14.99 per month Prime membership, users now have the option to pay an additional $2.99 per month for an ad-free experience.
Despite the introduction of ads, only 15% of subscribers opted for the ad-free tier. This shift did not impact Amazon’s subscriber count, and it is projected to generate $1.3 billion in ad revenue this year and $2.3 billion next year, as reported by Wall Street research firm MoffettNathanson.
According to a survey by Hub, the introduction of ads on Prime Video has revolutionized the video advertising landscape. Mark Loughney, a senior consultant at Hub, stated that Amazon Prime Video’s move to incorporate ads has been a game-changer. Amazon justified this change as a means to further invest in the platform. In 2023, Amazon MGM Studios received a record number of Emmy nominations, including 68 nods for original content such as “The Marvelous Mrs. Maisel.”
In June, Nielsen’s TV and streaming report revealed that Prime Video, while not as popular as Netflix and YouTube, surpassed competitors like Hulu, Disney+, and Peacock. The original series “The Boys” alone garnered 4 billion viewing minutes in June.
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Jeff Bezos. (Photo by Emma McIntyre/Getty Images)
With Amazon Prime Video’s ongoing evolution and success, it is clear that the platform is making a mark in the competitive streaming industry and continuing to grow its presence as a leading player in the market.