Amazon Prime Video Introduces Ads: A Strategy Shift Against Streaming Rivals

When Amazon.Com, Inc AMZN launched Amazon Prime in 2005, it promised a transformative shopping experience with its free Two-Day Shipping on a curated 1 million items.

Amazon's consistent logistics, software, and supply chain investments have enabled Prime to deliver at unprecedented speeds.

 Recent data indicates that most Prime orders in the top 60 U.S. metro areas now reach customers the same day or the next. 

This rapid delivery system has led to the dispatch of over 1.8 billion units to U.S. Prime members in just the first half of this year, a staggering growth compared to 2019 figures.

Also Read: Amazon's Power Play Backfires: Merchants and Regulators Push Back on New Fees

Prime Video, a significant pillar of the Prime membership, has consistently expanded its content library, offering a mix of blockbuster movies, series, and award-winning Amazon Originals. 

However, in a notable shift, starting in early 2024, Prime Video will introduce limited advertisements to its content. 

This move will likely support and amplify content investments. While the base price of Prime membership remains unchanged, members desiring an ad-free experience can opt for it at an additional $2.99 per month in the U.S. 

The move marks intense competition in the streaming space ruled by the likes of Netflix Inc NFLX, and Alphabet Inc GOOG GOOGL YouTube.

Amazon Prime costs $139 annually or $15 a month.

Amazon Prime's value proposition extends beyond fast deliveries and exclusive entertainment. From music streaming grocery savings to many other benefits, Prime continues redefining the standards of a premium membership. 

Meanwhile, the company is battling a Federal Trade Commission lawsuit for allegedly duping Prime customers.

The FTC prosecuted the company for its years-long effort to enroll consumers into its Prime program without their consent, making it difficult for consumers to cancel their subscriptions to Prime.

Price Action: AMZN shares traded higher by 1.44% at $131.15 premarket on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.