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.

 

 

One thought 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.

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