Amazon Prime Video will next year join streaming rivals in rolling out ads and introducing a higher-priced ad-free tier, as the industry grapples with a slowdown in subscriber growth since the pandemic.
The US tech giant said on Friday ads will be introduced in the US, the UK, Germany and Canada in early 2024, followed by France, Italy, Spain, Mexico and Australia later in the year.
Amazon’s ad-free tier will cost another $2.99 per month in the US, where a Prime subscription currently costs $14.99 per month, or $139 per year. Pricing for other countries will be shared later, the company said.
Netflix and Walt Disney have also rolled out similar measures, hoping a jump in ad revenue would make up for the slowdown in subscriber additions.
However, growth has been slow for the ad-supported plans. To boost subscriptions for the tier, Netflix has scrapped its basic commercial-free plan in the US and UK, while Disney has raised prices for its ad-free tiers.
Amazon already shows ads on live event content such as NFL’s Thursday Night Football, a practice that will continue even if the subscriber has paid for the ad-free plan, the company said.
The company said it plans to have fewer ads than traditional TV and other streaming providers, adding it would not raise prices in 2024 for the current Prime membership plan.
The online retail firm does not break out Prime membership numbers. But Insider Intelligence estimates Amazon Prime is the third-largest video-streaming platform in the US with 157.3 million subscribers, trailing only YouTube and Netflix.
After two disappointing earnings reports, Amazon reported better-than-expected quarterly sales growth and profit in August, on the back of an improvement at both of its main growth engines, e-commerce and cloud-computing.
