Why Does Prime Video Have Ads? Amazon Change-Up Explained

If you fired up your TV or mobile device to stream, say, The Boys or The Wheel of Time, you might be asking yourself, “Hey, self, why does Prime Video have ads now?”

Starting today, Tuesday, Jan. 30, 2024, Prime Video subscribers will see advertisements on the streaming platform — an expected total of two to three-and-a-half minutes of ads per hour of content, according to The Wall Street Journal — unless they agree to pay $2.99 per month more.

Amazon explained the addition of ads to Prime Video in a September 2023 message to customers, saying that it would include “limited advertisements” so that the company could “continue investing in compelling content and keep increasing that investment over a long period of time.”

For what it’s worth, Amazon also said it aims to have “meaningfully fewer ads than linear TV and other streaming TV providers.”

Of course, Amazon buried that ad announcement under more than 300 words singing the praises of Prime Video — and the Amazon Prime service in general — lest customers think about canceling their subscriptions. (Prime Video has hit movies! Great shows! Award-winning Amazon Originals! Live sports! Amazon Prime ships more than 300 million items with free Prime shipping!)

Amazon is just one of several streamers raising their subscription prices or adding ads to their offerings, as CNN notes. Netflix announced a $3 hike to its premium ad-free plan in October. Disney announced the same hike to its ad-free plan that same month. And Max, Warner Bros. Discovery’s streaming service, and Peacock, which is NBCUniversal’s, recently announced its first-ever price increases.

The changes come as streaming services stop chasing subscribers and start looking for other ways to make additional revenue to satisfy investors — amid decreasing customer demand and increasing production expenses — CNN explains.

Amazon’s ads on Prime Video are expected to result in an additional $3 billion in revenue in 2024 and an additional $7 billion in 2026, according to Morgan Stanley analysis CNNcites.

Neither Amazon nor analysts expect the introduction of ads on Prime Video to lead to a mass exodus of subscribers, The Wall Street Journal reports. But some people have already told WSJ that they are no longer Prime subscribers as a result of the change.

Andrew Scott Grace, a gig worker from Sharon, Pa., said that he canceled his Prime subscription — and even swore off shopping on Amazon — as soon as the company notified him of the transition to an ad-supported Prime Video. “There is only one way to show them that this is not OK: to cancel,” he said.

And Joel Gratcyk, a digital consultant from Chicago, told the newspaper he declined to renew his Prime subscription for the first time in more than five years when he learned of the addition of ads to Prime Video. He’s used to paying a subscription fee and enjoying an ad-free experience, as he does with Netflix. “If I have to watch ads, I shouldn’t have to pay for my entertainment,” he added.