Ad-Supported Amazon Service to Generate over $2 Billion in 2024

A recent analysis by Omdia suggests that Amazon's new ad-supported Prime Video service will generate over $2 billion in additional ad revenue in 2024, the year of its launch. This revenue will be in addition to the revenue already earned from advertising slots during live sports broadcasts on the platform.

As a result of the vast array of services it offers, Amazon Prime has successfully built a robust subscriber base of over 200 million. These services include free shipping, a wide range of products, music, cloud services, and now an ad-supported streaming service.

Amazon's advertising strategy differs from other streaming services such as Netflix in the sense that it uses a subscription model. With Amazon Prime, all users will be placed in the ad-supported tier of the service, with the option to pay more for an ad-free experience. In contrast, Netflix users begin in the non-ad-supported tier and can choose to pay less for a service that includes ads.

Matthew Bailey, Principal Analyst at Omdia, stated that "the forecasted global revenue of over $2 billion for Amazon's ad-supported Prime Video tier in 2024 indicates considerable growth potential for the streaming platform and reflects Amazon's efforts to diversify its revenue streams beyond subscription fees". He also pointed out that Amazon's closed-loop attribution capability and the fact that all users are ad-addressable by default will contribute significantly to the company's success.

Omdia's research also considers the introduction of new services by Amazon's ad-supported Prime Video, including shoppable TV, which allows viewers to directly purchase products they see in shows or movies, creating a new avenue for e-commerce within the streaming platform. The report also predicts more partnerships between prominent retailers, broadcasters, and online video platform owners as they look to compete with Amazon.