2024 Amazon Prime Video Ad Launch Disrupts Streaming Industry

Amazon Prime Video made a big splash in January 2024 with the launch of its ad-supported streaming option, changing the game for streaming services. Now, Prime subscribers can enjoy their favorite shows with ads, or pay an extra $2.99 per month for an ad-free experience.

It’s estimated that around 80% of Amazon’s 130.4 million US Prime Video viewers are opting for the ad-supported option, giving the platform a massive advertising audience of about 104.3 million. In comparison, Netflix recently revealed that it has 70 million monthly ad-supported viewers globally, while Disney+ has around 37% of its US subscribers and 30% of its worldwide audience using the ad-supported tier.

The introduction of Amazon Prime Video into the advertising market has led to a decrease in CPMs (cost per thousand viewers) across streaming services. Platforms like Netflix, Max, and Disney+ initially set high CPMs in 2022, but Netflix dropped its prices to compete after Amazon Prime’s ad launch.

In a major move, Amazon secured $1.8 billion in upfront commitments this year, marking a successful first upfront season. The platform has been actively introducing new advertising features over the past two years, attracting even more interest from advertisers.

One key area for Prime Video is sports advertising, with the platform attracting 50 new advertisers for Thursday Night Football, in addition to returning brands like Verizon and Allstate. The merging of Freevee, Amazon’s free ad-supported service, into Prime Video has streamlined its advertising offerings.

With its strong position in the market, ties to e-commerce through its marketplace, and a lucrative deal for Thursday Night Football rights, Prime Video is shaping up to be a major player in streaming and CTV ad innovation in the coming years.

Overall, Amazon Prime Video’s foray into advertising has reshaped the streaming landscape, lowering costs for advertisers and setting the stage for further industry innovation.