Amazon Punts on Ad-Supported Prime Video

As early pioneers of subscription video-on-demand, Netflix, Amazon Prime Video and Hulu command a lions share of North American over-the-top video consumers.

Yet other than Hulu’s basic subscription plan, none of the services feature advertising – despite collectively having more than 100 million domestic subs.

With original content costs skyrocketing, industry analysts contend it’s only a matter of time before Netflix & Co. welcome Madison Ave.’s fiscal largess.

When asked on the July 25 fiscal call whether Amazon (i.e. Prime Video) might become a “bigger player” in video advertising, Dave Fildes, director of investor relations, largely avoided giving a straight answer.

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“We’ve taken some steps with live sports and [ad-supported subsidiary] IMDb TV, but we’ll continue to do things like add more OTT video supply, things like Amazon Publisher Services integrations and simplifying access for third-party apps and add more inventory through things like Fire TV apps and IMDb TV,” Fildes said.

Translation: Don’t expect to see ads on Prime Video anytime soon.

Instead, Amazon plans to focus ad-revenue growth through a suite of cloud-based platforms such as Publisher Services, which feature “transparent” ad marketplaces for mobile apps and intel “insights” on third-party consumers, among other features.

“It’s a matter of continuing to work with advertisers and brands and kind of building up not only awareness, but how things like sponsored products interact with customers and how they [perceive] them,” Fildes said.

Indeed, Netflix contends subscribers would react negatively to ads.

“We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction,” CEO Reed Hastings said on the SVOD behemoth’s recent call.

At the same time, NBC Universal is rolling out a branded ad-supported streaming service next April for Xfinity subscribers. Non-subs will be able to pay for access.

“Our service is … a very innovative way of coming into the market,” Steve Burke, CEO of NBC Universal, said on Comcast’s July 25 fiscal call.



6 thoughts on “Amazon Punts on Ad-Supported Prime Video”

  1. who watches commercials? they are fast forward 98% of the time. i can s, shower and shave during the average commercial break, especially during a football time out.

  2. 20 minutes into MI:3 on Amazon Prime and a 30 second ad for Vikings started. Completely wrecks the flow of the movie. Any chance of a followup on your article?

  3. Haha. I guess we’re past the “any time soon” period. Amazon has been displaying skipable ads at the beginning of their movies for quite a while, but they are now getting really aggressive – unskippable ads in the middle of the movie. I pay for Prime so I don’t have to watch ads – if I wanted ads, I would use Hulu.

    I’ve already been evaluating whether it is worth paying for Prime for shipping speed, but with the movies getting ads, it makes the value go down.

  4. “past the ‘any time soon’ ” …Exactly. I found this article googling “why are there now ads on Prime Video”? I guess I haven’t had prime for awhile, but now that I am back, it’s quite annoying.

  5. I also stumbled onto this article googling why there are adds in the middle of my Prime Video series. I am surprised as to how Dave Fildes comment “simplifying access for third-party apps and add more inventory through things like Fire TV apps and IMDb TV” turns into “Translation: Don’t expect to see ads on Prime Video anytime soon.”
    Apparently the rights to the current 12 season series that I have been watching have been purchased by IMDbTV. I am in season 8 and last night, for the very first time, I experienced commercials several times during the 48 minute episode.
    It has become obvious that, once again, commercials/ads will eventually be injected into our viewing material. However, it will be done in such a way that Amazon Prime can not be held responsible for it.
    I will also be reviewing if I wish to renew my membership with Amazon Prime.

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