Amazon.com Inc. said it will introduce limited advertisements to its Prime Video streaming service in the US, UK, Germany and Canada early next year as it seeks to increase investment in content.
(Bloomberg) — Amazon.com Inc. said it will introduce limited advertisements to its Prime Video streaming service in the US, UK, Germany and Canada early next year as it seeks to increase investment in content.Â
Prime will also include an ad-free option for an additional $2.99 per month in the US, while pricing in other countries will be published later, the company said in a statement on Friday.Â
Amazon follows other streaming provides including Netflix Inc. and Walt Disney Co., which have both raised subscription prices. As production costs have grown and competition among a slew of platforms has intensified, many streaming providers have been forced to turn to advertising, at least as an option, to help increase revenue.
One demand by the Writers Guild of America in its monthslong labor standoff with the major Hollywood studios has been for additional payments for the success of TV shows on streaming services.
Amazon said it would aim to have fewer ads than on linear television and other streaming providers. The move comes as the world’s largest online retailer is engaged in a companywide cost-cutting program.Â
Amazon has invested heavily into streaming, which it sees as a way to increase the value of its Prime subscription service and attract new customers. Last year, it bought Hollywood movie studio MGM for $8.5 billion to expand its library and it spent an estimated $1 billion on the Lord of the Rings: The Rings of Power series that aired last year.
Ads will appear in other markets, including France, Italy, Spain, Mexico, and Australia, later in the year, according to the statement. Amazon Prime costs $139 annually or $15 a month in the US.
(Updates with context starting in the fourth paragraph.)
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