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Amazon expected to launch ad

May 31, 2023

Photo by Katja Knupper/Die Fotowerft/DeFodi Images via Getty Images

Amazon's leadership last week green-lit a plan to create an ad-supported tier for its Prime Video service, a source confirmed to Axios.

Why it matters: An ad-supported tier will help the company bolster its ad business at a time when more dollars are shifting from linear television to streaming. It could also help lure more subscribers to its video service.

Be smart: The move comes weeks ahead of the annual Cannes Lions creative festival each year, which brings together the world's biggest advertising and publishers to discuss deals and new products.

State of play: It's unclear when an ad-supported tier would roll out. But unlike rival Netflix, which just launched its own last year, Amazon already has a well-established advertising team and advertising video products that can help inform its efforts.

Zoom out: More streamers are adding ad-supported tiers to their products in an effort to bolster revenue and grow subscriber bases.

The big picture: Amazon has the fastest-growing ad business in the world, per Insider Intelligence. Right now, Amazon mostly sells ads to retailers looking to boost their products in Amazon's search results.

What they're saying: The company is still "very early" in its efforts to place ads in video, live sports, audio and grocery, CEO Andy Jassy told analysts during a recent earnings call.

By the numbers: Amazon is already expected to take nearly 40% of new search ad dollars this year, according to Insider Intelligence.

What to watch: Netflix recently touted early success of its ad-tier, revealing that it drew nearly 5 million monthly active users to its service within the first 200 days of launch.

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Why it matters Be smart State of play Zoom out The big picture What they're saying: By the numbers: What to watch: