Amazon Prime Video Ad Introduction: User Retention Study

Lilu Anderson
Photo: Finoracle.net

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.

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Lilu Anderson is a technology writer and analyst with over 12 years of experience in the tech industry. A graduate of Stanford University with a degree in Computer Science, Lilu specializes in emerging technologies, software development, and cybersecurity. Her work has been published in renowned tech publications such as Wired, TechCrunch, and Ars Technica. Lilu’s articles are known for their detailed research, clear articulation, and insightful analysis, making them valuable to readers seeking reliable and up-to-date information on technology trends. She actively stays abreast of the latest advancements and regularly participates in industry conferences and tech meetups. With a strong reputation for expertise, authoritativeness, and trustworthiness, Lilu Anderson continues to deliver high-quality content that helps readers understand and navigate the fast-paced world of technology.