Much has been said about Amazon Prime Video’s decision to automatically opt existing subscribers into its ad-supported subscription tier when it launched earlier this year. While it had the potential to quickly give scale to Amazon’s nascent ad offering, it also risked turning off existing subscribers who were particularly averse to ads. Fresh data released by the tech giant suggests its strategy has paid off, as the company announced at its UK Upfronts presentation last night that Amazon Prime Video’s ad-supported tier reaches 19 million UK customers, equal to over a third of all UK adults.
Amazon didn’t further qualify this data in terms of how much content these customers view each week, which is a major factor in measuring the true scale of Prime Video’s ad business. Amazon has also kept its ad load comparatively light across the service, again limiting its total volume of ad inventory.
Nonetheless, the figure gives an idea of how Amazon’s TV ad offering is shaping up compared to its competitors. Data from Barb back in August found that Netflix’s ad-supported tier reached 2.7 million households (or roughly 6.3 million individuals when accounting for an average of 2.3 individuals per household), while Disney+’s ad tier reached 820,000 households, or 1.9 million individuals.
Now, having avoided a sharp drop in subscribers after introducing ads, the company is looking to bump up its ad load. Kelly Day, vice-president of Prime Video International, told the FT that its ad load will “ramp up a little bit more into 2025”.
Boiling a frog
The question now for Amazon will be how much it can increase its ad load without leaking too many users. At launch, the company said it would run between 2-3.5 minutes of ads per hour of content, significantly lower than many of its competitors. This may have helped prevent substantial churn after introducing ads, but has also limited the volume of inventory Amazon has been able to sell.
Alongside ramping up ad loads, Amazon will also look to introduce new formats and data-based offerings to boost ad revenues from Prime Video. At the Upfronts presentation, Amazon said it will launch interactive video ads in the UK in 2025, which will enable audiences to add items to their Amazon cart via their TV remote. The service will also launch interactive pause ads and shoppable carousel ads next year.
“These new ad formats enable viewers to learn more about, and make a purchase from, your brand without ever having to leave the viewing experience,” said Phil Christer. “This not only makes it easier for Prime members but it also helps brands to unlock insights into lower-funnel interactions and better inform their campaign strategies.”