Amazon will begin airing ads in its Prime Video television shows and movies on January 29.
That means Prime Video subscribers, who pay $139 per year for a Prime membership, will see “limited” ad interruptions starting on that date, Amazon said Tuesday in a statement to customers. People who pay for the stand-alone Prime Video subscription, which costs $8.99 per month, will also see ads starting on January 29.
However, Amazon said subscribers can avoid the ads by paying an extra $2.99 per month for an commercial-free subscription.
Prime Video’s new subscription strategy comes amid an industry-wide shift toward a tiered subscription model. Streaming platforms such as Disney+, Netflix, Hulu and Peacock have already introduced ad-supported subscription options alongside more costly ad-free offerings.
“This will allow us to continue investing in compelling content and keep increasing that investment over a long period of time,” Amazon said in the email. “We aim to have meaningfully fewer ads than linear TV and other streaming TV providers.”
Amazon, which first announced the ad-free tier in September, did not immediately respond to CBS MoneyWatch’s request for comment.
Streaming services are embracing tiered subscription models to boost revenue as they pour massive amounts of money into costly content amid the escalating streaming wars. The tiered model boosts sales by bringing in both ad dollars and incentivizing some subscribers to shell out more money for higher-tier subscriptions, according to the U.S. Chamber of Commerce.
Amazon’s advertising business, which includes Amazon marketplace advertisements and Freevee, has served as a major revenue source for the company. In the third quarter, the tech giant raked in roughly $12 billion in revenue from advertising, up 26% from the same quarter last year, the company’s financial statement shows.
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