Amazon.com Inc. (NASDAQ:AMZN) is reportedly set to increase the number of advertisements on its Prime Video platform starting next year. This initiative is part of the company's broader strategy to enhance its ad-supported streaming services.
What Happened: Since introducing ads eight months ago, Amazon has not seen a significant drop in subscribers, alleviating fears of a negative reaction. Kelly Day, Prime Video International's vice-president, mentioned that more ad slots will be available for brands by 2025, according to a Financial Times report.
During its inaugural London "up front" event on Wednesday, Amazon will outline its advertising plans to attract investment for the upcoming year. Day noted that the ad "load" would see a slight increase into 2025.
Amazon's foray into the ad-supported streaming market positions it alongside competitors such as Netflix Inc. (NASDAQ:NFLX) and Walt Disney Co. (NYSE:DIS). The company aims to showcase its ability to reach 19 million monthly viewers in the UK and 200 million globally.
Interactive ad formats will also be introduced, allowing viewers to engage directly with brands through their devices. This initiative underscores Amazon's capability to convert ads into sales on its retail platform.
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Why It Matters: Amazon's decision to expand its ad presence on Prime Video comes at a time when the streaming landscape is rapidly evolving. Earlier this year, Amazon introduced ads on its platform, aiming to boost its $38 billion advertising business. This move marked a significant shift in the streaming advertisement arena, presenting a lucrative opportunity for advertisers seeking to connect with audiences across various streaming services.
In July, Amazon was reported to be undercutting rival Netflix Inc. (NASDAQ:NFLX) on advertising pricing, as it battles for marketers' attention. The company is going through its first "up front," where television companies present their plans to advertisers to attract funding for the next year.
Moreover, Amazon CEO Andy Jassy stated in August that Prime Video intends to have "meaningfully fewer ads" than competitors like Netflix, YouTube, and Disney+. This approach highlights Amazon's strategy to differentiate itself in the crowded streaming market.
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