Amazon’s Prime Video is set to outpace Netflix significantly starting this week, not in terms of viewership or content library size, but due to the introduction of an ads business. While Netflix’s ad-supported subscription tier has seen modest uptake with around 23 million users globally, Prime Video is about to surpass that substantially.
Starting January 29th, Prime Video will transition its entire platform into an ad tier, with the only opt-out option being an additional fee for the reported 115 million users who prefer an ad-free experience. In contrast, Netflix opted for a separate, cheaper ad-supported tier.
The differing approaches reflect contrasting monetization strategies. Prime Video’s move might be perceived as coercive, where users must pay extra to avoid ads, while Netflix offers the choice to pay less for an ad-supported option.
Netflix co-CEO Greg Peters expressed reservations about Prime Video’s approach, emphasizing Netflix’s commitment to an ad-free experience. Some creators, like Lulu Wang of the Prime Video series “Expats,” voiced frustration over the sudden introduction of ads, which may affect content creation strategies.
Prime Video users can retain an ad-free experience by paying an additional $2.99/month. While some analysts speculate that most users won’t opt for this, anecdotal evidence suggests dissatisfaction among users, potentially impacting Amazon’s reputation, especially considering other recent controversies surrounding Prime services.
Despite potential backlash, analysts are eager to see the impact of Prime Video’s entry into the advertising market, leveraging its vast reach and data advantages.
