In the coming year, Amazon Prime Video will undergo a pricing adjustment for its ad-free experience, resulting in a higher cost than its current rates. Beginning in early 2024, Amazon plans to introduce advertisements into Prime Video content, requiring an additional payment of $2.99 to maintain an ad-free viewing experience.
This change will affect Prime Video users in the United States, Canada, Germany, and the United Kingdom. Amazon will notify subscribers via email several weeks before the ad integration begins, offering them the option to pay the extra $2.99 to remain ad-free.
Consequently, the cost of ad-free Prime Video will rise from $8.99 per month to $11.98 per month when subscribed independently and from $14.99 per month to $17.98 per month when bundled with Amazon Prime.
Here’s a comparison of the new pricing against other ad-free streaming services:
Apple TV+: $6.99
Disney+: $13.99 (effective October 12)
Hulu: $17.99 (effective October 12)
Amazon’s rationale for this change is to continue investing in high-quality content and sustain this investment over the long term. Prime Video is a substantial commitment for Amazon, with a 2022 expenditure of $16.6 billion, including $7 billion dedicated to original content.
This shift follows reports from June that Amazon was considering introducing an ad-supported Prime Video tier due to strong advertiser interest. The company is already deeply involved in advertising, with second-quarter earnings revealing a 22 percent YoY growth in advertising services revenue, reaching $10.9 billion. In terms of digital ad revenue, Amazon ranks third, behind only Google and Meta, according to Insider Intelligence.
While some Prime Video content already includes product placements, and sports programming on the platform contains ads, extending ads to the entire service allows Amazon to generate additional revenue from both advertisements and viewers opting to pay extra to avoid ads.
Amazon did not provide extensive details about the upcoming change, but it’s worth noting that it aims to show about 4 minutes of ads per hour, which is relatively lower than some competitors. For comparison, Peacock displays up to 5 minutes per hour, while a May report from Insider Intelligence, citing data from MediaRadar, indicated that Disney+ shows 5.3 minutes of ads per hour, Netflix displays four minutes, and Hulu includes 7.3 minutes.
With starting prices currently at $9.99 per month, Prime Video has been one of the more budget-friendly options for ad-free streaming TV. However, these changes bring its pricing more in line with competitors, potentially disappointing cost-conscious cord-cutters. Streaming services initially emerged as a more affordable and straightforward alternative to cable TV, but with the proliferation of services, shifting pricing structures, complex bundles, and scattered content, the landscape has evolved considerably.