Amazon in talks to launch ad-supported tier on Prime Video

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Amazon is considering launching ad-supported tier plans for its Prime Video streaming service in an effort to generate more revenue from its entertainment offerings, according to The Wall Street Journal who were citing people familiar with the matter.

The report noted that discussions surrounding ad-supported tiers are still in the early stages and that Amazon may follow the ad-supported plans offered by streaming platform rivals Netflix and Disney or not move forward with ad-supported tiers at all.

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Currently, Prime Video uses ad-supported programming for its sports coverage with some of its shows also having product-placements.

In terms of execution, it will likely work to bring more advertising to existing Prime subscribers and give them an option to pay more for an ad-free alternative with the desire to keep ad breaks short, according to media reports. This is so that they will be able to attract subscribers and retain existing customers.

Additionally, Amazon is also reportedly in discussions with Warner Bros. Discovery and Paramount Global about including the ad-supported tier of their streaming services through Prime Video Channels.

MARKETING-INTERACTIVE has reached out for a statement.

This news comes in the wake of Amazon’s cost-cutting measures after it laid off employees in its cloud services division as part of a retrenchment exercise that was announced on March 20. The exercise was expected to affect about 9,000 employees including those in Singapore. This is one of the largest rounds of retrenchments the company has undergone.

The exercise was first announced in March by Amazon's chief executive Andy Jassy in an internal message that was later posted to the company's blog. In his post, Jassy said that following the conclusion of the second phase of its operating plan, that it intends to eliminate about 9,000 more position in the coming weeks. He clarified that these positions would mostly be in AWS, PXT, Advertising, and Twitch.

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