Amazon Introduces Ads to Prime Video: Will Users Stay or Go?
Amazon has made a significant change to its popular streaming service, Prime Video, by introducing ads. However, despite this move, only a small number of users are likely to stop using the service, according to a recent study by Hub Entertainment Research.
Positive Response to Ads
The study found that a majority of Prime Video users are unfazed by the introduction of ads, with 59% indicating that they would continue to watch the streaming platform even with advertisements. Only 15% of respondents said they would stop watching altogether.
Options for Ad-Free Viewing
For those who prefer an ad-free experience, Amazon offers an alternative. The study revealed that 26% of users would be willing to pay an additional monthly fee of $2.99 to remove ads from their Prime Video experience.
Impact on Prime Subscriptions
While the research did not provide clarity on whether users who decide to stop watching Prime Video would also cancel their Prime subscription, it did suggest that there was a reduced inclination among this group to remain Prime subscribers in the next three months.
The Changing Landscape of Streaming
This situation highlights the increasing presence of advertising in the streaming industry, marking a departure from the ad-free subscription models of previous years. Prime Video's new standard ad tier also comes with the removal of certain features like Dolby Vision or Dolby Atmos.
Boost for Amazon, Challenge for Cable TV
Amazon's decision to incorporate ads into Prime Video is seen as a positive move for the company, potentially enhancing its position in the advertising market. However, this shift may pose challenges for traditional cable TV providers, as ad budgets could increasingly shift towards streaming platforms.
Ads as an Unavoidable Element of Streaming Media
Ultimately, this development signals that ads are becoming an inescapable aspect of the streaming media landscape. As viewers adapt to this new normal, both streaming platforms and advertisers will need to navigate the balance between effective advertising and maintaining user satisfaction.
Analyst comment
Positive news. Analyst: Amazon’s decision to introduce ads into Prime Video may have a minimal impact on user retention. The majority will continue watching with ads or pay a fee to remove them. However, there is uncertainty if this will affect Prime subscription rates. This change signifies the growing presence of ads in streaming and can boost Amazon’s advertising position. Traditional cable TV may face challenges as ad budgets shift towards streaming platforms. Ads are becoming an integral part of streaming media.
