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Amazon Prime Video is more than just a side benefit of a Prime membership – Amazon is expanding the streaming service into a standalone service.
Jeff Bezos saw Prime Video “as an opportunity to build a media company,” not just a spin-off of Prime, Prime Video CEO Mike Hopkins told Reuters on Wednesday.
Amazon has been working on this vision for four years. Prime Video became the largest ad-supported streaming service in the US in January after it began bombarding movies and TV shows with ads by default for its 115 million US subscribers. Prime Video is included in Amazon's Prime membership for $14.99 a month; as of January, the ad-free option costs an additional $2.99 a month.
Related: Amazon Prime Day sales could surpass $14 billion, hitting an all-time high – here's why
Most subscribers no longer wanted to pay per month for ad-free TV – only 15% opted to pay extra. The switch to advertising had no impact on Amazon's total subscriber count, according to a Hub survey, and could bring in $1.3 billion in ad revenue this year and $2.3 billion next year, according to Wall Street research firm MoffettNathanson.
“Virtually overnight, Amazon Prime Video has dramatically changed the video advertising ecosystem,” said Mark Loughney, senior advisor at Hub. Jeff Bezos. (Photo by Emma McIntyre/Getty Images)
Amazon described the move to advertising as a way to continue investing in Prime Video. Amazon MGM Studios had its most successful year in 2023, with 68 Emmy nominations for original content such as “The Marvelous Mrs. Maisel.”
Nielsen's June TV and Streaming report found that while Prime Video wasn't as popular as Netflix and YouTube, it was ahead of Hulu, Disney+ and Peacock. Prime Video original series The Boys attracted 4 billion minutes of viewing in June.
Related: Prime Day is reportedly a ‘major’ source of injuries for Amazon warehouse workers
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