We now know when Amazon will add advertising to its Prime Video offering

Amazon has confirmed when its Prime Video offering will start showing ads unless subscribers pony up extra money.

Jan. 29, 2024, has been announced as the date that Prime Video will begin showing ads to all existing and new users of its streaming video platform.

Prime Video is sold both as part of the broader Amazon Prime membership program, which costs $14.99 a month or $139 a year, or on its own for $8.99 a month.

Starting Jan. 29, it will cost an extra $2.99 a month to remove ads from the offering.

This means that users wanting to keep their memberships the same as they currently are will have to pay $17.98 a month to get all Prime benefits or $11.98 a month for just an ad-free Prime Video subscription. That results in about $36 in extra revenue for Amazon per year per subscriber.

The ad-supported model is planned for United States, Great Britain, Germany and Canada initially, with France, Italy, Spain, Mexico and Australia expected later in 2024.

It wasn’t immediately clear how often ads would appear or if they will be skippable, though it’s a common model to make viewers watch up to a few minutes of non-skippable ads per hour of content. 

The change will not affect Amazon’s FAST Freevee streaming platform, which is completely free but users are forced to watch ads. There is no option to remove ads from Freevee.

Advertisement

The change comes as increasing competition and content costs are rocking an already delicate streaming industry faced with worries of churn rates, a cluttered marketplace and increasing costs.

Many other big names in streaming, including Netflix, Max and Disney+, have all introduced ad-supported plans that make the monthly subscription fee lower than ad-free options. Paramount+ and its predecessor CBS All Access, has used the model since its debut in 2014.

This move is, in part, driven by the need to make price-conscious consumers who have to subscribe to multiple streaming services to enjoy all the content they want, less likely to cancel or pause memberships. 

Research shows that the approach of paying less in exchange for watching more ads appeals to consumers. One study suggests that at least 3 in 5 consumers are willing to watch ads to save $4 to $5 a month on a service.

There’s a flip side for streamers too — many are able to not only make up for the lower subscription rate but can actually bring in more revenue from showing ads, which has made the practice much more appealing.