More ads are coming.
According to a report by the FT, Amazon will increase ad breaks on Prime Video in 2025. The rollout is part of the company’s effort to drive more revenue from its ad-supported streaming model. According to the FT, the company hasn’t seen a drop in subscribers since introducing ads to Prime Video eight months ago. So, they feel emboldened to do more.
At the company’s first London upfront, Kelly Day, VP of Prime Video International, told the FT that its ad “load” would “ramp up a little bit more into 2025.”
In September 2023, when the company announced ads for Prime Video, it said: “To continue investing in compelling content and to sustain that investment over time, starting in early 2024, Prime Video shows and movies will include limited advertisements. We aim to have meaningfully fewer ads than linear TV and other streaming providers.”
Will the ad load still be lighter than others? “Aim” and “will” are two different things. But we’ll see.
Why This Matters:
As more ad dollars shift towards CTV, streamers are increasing ad breaks (even in lower SVOD tiers), and advertisers are eager to connect with audiences. CTV has traditionally had fewer ad breaks, so Amazon’s move to expand ad inventory makes sense.
Day also mentioned that the company will finally introduce interactive and “shoppable” ad formats for Prime Video. This puts Amazon in a position to catch up with other services that already offer these features. Given Amazon’s wealth of data and ecommerce capabilities, this could be a major win for them and their retail media partners, for example.
Experts React:
Eric Seufert, analyst and investor, commented about the news on X: “The inevitability of widespread ad load increases.”
He then linked to an article he wrote for Mobile Dev Memo in 2022, where he discusses a “challenging operating environment and a deteriorating outlook for the digital advertising market—both for the platforms that sell ad inventory and the firms dependent on direct response digital advertising for growth.” He goes on to explain that “improving ad load” is one of the most obvious and easy ways to juice ad revenue, as the load can be adjusted quickly to react to the market or headwinds.
Our Take:
Streamers are working out how to add more ad opportunities to their services and platforms. From pause ads to native screensaver ads and more, streaming has been a tough space to monetize as premium content is expensive and the market is hugely competitive.
However, the ARPU of ad-supported models will only get better as these formats continue to grow. Amazon, given its ownership of a streaming and ecommerce platform, along with its adtech business, is sitting pretty.
