Amazon (AMZN) is reportedly planning to launch an advertising-supported tier of its Prime Video streaming service as the internet retail and streaming giant looks to further build its ad business and generate more revenue from entertainment.
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The discussions, which are in the early stages, have been going on over the past several weeks, the Wall Street Journal reported, and come in the wake of cost-cutting reviews across the company’s businesses, resulting in tens of thousands of layoffs.
Amazon announced it was eliminating 9,000 jobs on March 20, which were in addition to 18,000 layoffs the company had declared in January.
Advertising has been an area of continued growth for Amazon despite macroeconomic challenges.
The company’s ad revenue was $9.5 billion in the first quarter, up 21% year over year. The company is the third-biggest player in terms of digital ad revenue in the U.S. after Google (GOOG)L and Facebook parent company Meta (META), the Journal reported, citing Insider Intelligence.
Advertisers say they are eager to have Amazon offer an ad tier for Prime Video service, which would follow similar moves by other streaming platforms including Netflix (NFLX) and Disney (DIS).
Ad buyers say they want more access to premium movies and programs that have remained largely ad free, content that often garners more buzz.
Prime Video, which is available to all customers who pay $14.99 a month for Amazon’s Prime membership, and on its own for $8.99 a month, has original shows like “The Marvelous Mrs. Maisel,” a library of movies and live-sports offerings including the National Football League’s “Thursday Night Football” games.
Separately, the Journal reported, Amazon is having discussions with Warner Bros. Discovery (WBD) and Paramount Global (PARA) about adding the ad-based tiers of their streaming services through Prime Video Channels, according to people familiar with the situation.
Through Prime Video Channels, users can sign up for streaming services—including the ad-free versions of Max and Paramount+—and view through the app.
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