Advanced Television

Forecast: $2bn boost from Prime Video ad tier

January 30, 2024

Following the debut of Prime Video’s ad-supported tier, analysis from Omdia reveals the streaming platform is set to generate more than $2 billion (€1.84bn) in incremental ad revenue in 2024, its launch year. This will be in addition to revenue already generated by the sale of advertising slots during live sports broadcasts on the service.

Amazon Prime has successfully built a strong subscriber base of over 200 million reflecting the range of services it offers, including extensive shopping incentives, music and cloud services. These services allow Amazon to remain competitive and continue to attract and retain customers.

The main difference between Prime Video’s advertising strategy compared to other players such as Netflix is the subscription model. Prime Video will place all current users into the ad-supported tier of its service, giving subscribers the option to pay extra to view without advertising. Netflix users all begin in the non-ad-supported tier and have the option to pay less for a service that incorporates advertising.

“The forecasted global revenue of over $2 billion for Amazon’s ad-supported Prime Video tier in 2024 indicates considerable growth potential for the streaming platform and reflects Amazon’s efforts to diversify its revenue streams beyond subscription fees,” advised Matthew Bailey, Omdia Principal Analyst. “A significant factor contributing to Amazon’s success will be their capability to provide closed-loop attribution and the inherent advantage of having all their users ad-addressable by default. Amazon has already experimented with directly shoppable ad formats, and this would enhance their ability to monetise their platform even more.”

Omdia’s research also considers the introduction of new services from ad-supported Prime Video, including shoppable TV. This feature allows viewers to directly purchase products they see in shows or movies, creating a new avenue for e-commerce within the streaming platform.

“Omdia expects more partnerships between prominent retailers, broadcasters, and online video platform owners as they look to compete with Amazon,” adds Bailey. “These will range from data-sharing partnerships to enable commerce-led video advertising measurement and targeting through to direct retailer integration with video services.”

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