Ad-Supported Prime Video Option Hit With Class Action Lawsuit

A Prime Video subscriber in California has filed a lawsuit against Amazon alleging the recent rollout of an ad-supported option forces annual and longtime subscribers to pay more ($2.99 monthly) for the ad-free service option.

The suit, filed Filed Feb. 9 by plaintiff Wilbert Napoleon in U.S. District Court in Washington, alleges Amazon is violating multiple consumer protection laws by misleading Prime subscribers who signed up with the belief they were getting access to ad-free video content.

Napoleon, who renewed his annual Prime membership in June 2023, believes he should have access to ad-free Prime Video through May 2024 before having to decide whether to pay an additional monthly fee.

“Reasonable consumers expect that, if you purchase a subscription with ad-free streaming of movies and tv shows, that the ad-free streaming for movies and TV shows is available for the duration of the purchased subscription,” read the complaint.

Napoleon, who is seeking an injunction and undisclosed financial damages, wants the suit classified as class action status affecting all Prime subscribers through Dec. 28, 2023. The suit claims there are 160 million Prime subscribers in the United States.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Report: AVOD Popularity Undermines Perceived Anti-Ad Bias

One of the appeals of SVOD has been the lack of commercials. However, new data on AVOD and free ad-supported streaming television, or FAST, suggests consumers could be changing their mind and commercial interruptions — for the right price.

Hub Entertainment Research revealed new data that contends less than 20% of survey respondents absolutely refuse to stream content with advertising. Indeed, 95% of all TV consumer respondents said they watch some programming with ads. Another 79% stream content from at least one ad-free platform.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The Massachusetts and New Hampshire-based research firm contends that almost 50% of Netflix subscribers polled said they would watch pre-roll ads (ahead of programming) if their monthly service fee dropped to $5 or less. The percentage of subscribers opting for ads injected into the programming declined to 39%.

“What’s clear from these findings is that what matters to consumers is not whether ads are included in the content they watch, but how ads are delivered,” said Mark Loughney, senior consultant and co-author of the study. “Even consumers who say they’re categorically opposed to ads will use an ad-supported platform if the price and ad delivery are right.”

Indeed, among respondents who were opposed to any type of advertising, 30% said they would accept advertising if the monthly subscription savings was from $4 to $5 dollars.

Finally, among respondents who said could not tolerate commercials within programming, 57% said they would be more likely to try AVOD distribution — a percentage that was higher than among respondents more receptive to advertising.

Report: Ad-Supported HBO Max to Cost $9.99 Monthly

WarnerMedia’s June debut of an ad-supported version of HBO Max will reportedly cost subscribers $9.99 per month, compared to $14.99 for the current ad-free option that launched last May. HBO and HBO Max ended the most-recent fiscal period with 44.2 million combined subs. The platforms are projected to have from 120 million combined subs by 2025.

CNBC reported the price point, citing sources familiar with the situation.

“Whether a customer chooses to buy the ad-supported product or buy the straight subscription product, it’s accretive in the same ways to our business,” AT&T CEO John Stankey said on the company’s recent fiscal call. The executive said the ad insertions are not reflective of a failed SVOD platform, but rather a way to mine incremental revenue. Max will only add commercial spots to exclusive programming, not HBO shows.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

WarnerMedia had originally considered charging $4.99 for the ad-supported option, but reconsidered, arguing a higher subscription price is a sign “of strength,” according to Stankey.

“It’s always been the plan,” he said.

Rival ad-supported plans from Paramount+ and Peacock cost $4.99. Hulu’s ad-supported plan costs $5.99 monthly.