The last major ad-free streaming service is going away. Starting Jan. 29th, Amazon users will start seeing advertisements appear on movies and TV shows for Prime Video, according to an email sent to subscribers on Tuesday. To keep Prime Video ad-free, you’ll need to pay an additional $US3 a month, on top of the $US139 a year members already pay for Amazon Prime.
“Starting January 29, Prime Video movies and TV shows will include limited advertisements,” said Amazon in an email to Prime members. “This will allow us to continue investing in compelling content and keep increasing that investment over a long period of time.”
The five largest streaming services in America will all have ads now. Prime Video is following suit from Max and Paramount+, which launched an ad-supported tier in 2021, as well as Netflix and Disney+ which launched ad models in late 2022. We previously learned that this change was coming for Prime members, but now we know exactly when our streaming dreams will die.
Streaming services once offered a vision that TV and film content could thrive on a subscription model, offering users premium content for a low monthly fee, free of ads. Prime was the last major streamer to hold off on introducing ads, but now it has followed the other media giants.
Streaming has essentially become a more curated version of cable. In a subscription model, a streaming service’s viewers are the customers: they fund the company to see premium content. However, in an ad-supported model, the customers are the product: Prime Video has premium (wealthy) viewers that are now sold as a demographic to advertisers and Amazon has tons of data on what its subscribers like to buy. Throwing in advertisements to save users $US3 a month feels like a subtle shift, but Prime Video’s announcement feels like the last nail in the coffin for subscription streaming. The only major difference from cable now is that streaming services are algorithmically curated to your preferences.
The shift to advertising likely means the subscription model just can’t be profitable at scale. The pioneer of subscription streaming, Netflix, has experienced much slower growth in recent years, causing it to crack down on password sharing to drive up subscriptions.
The only major player left without ads on its streaming service is Apple. However, Apple likely doesn’t need Apple TV to be profitable, as the service strengthens its ecosystem of products. The same could be said for Amazon’s Prime Video, however, but that’s not the route they’ve chosen to go.