Amazon Prime Video joins the ad-supported streaming club

Amazon plans to introduce “limited” advertising on Prime Video movies and shows, beginning early next year.

The company’s release said the U.S., U.K., Germany and Canada will be the first countries to get Prime Video ads, though Amazon didn’t specify the timing beyond “early 2024.” France, Italy, Spain, Mexico, and Australia are set to introduce Prime Video ads later in the year.

Amazon said it doesn’t plan to make changes to the current price of Prime membership, which is $14.99 per month or $139 annually. It will, however, offer a new ad-free tier for U.S. Prime members that will cost an additional $2.99 per month.

Pricing for the tier in other countries will be shared at a later date. It’s also worth noting the ad-free tier will still include advertising in live event content, such as sports.

The reason for ads, according to Amazon, is to “continue investing in compelling content and keep increasing that investment over a long period of time.”

Earlier this year, Amazon disclosed it spent $16.6 billion on digital video and music content in 2022, with around $7 billion going toward originals, live sports and licensed third-party video content.

Some of Amazon’s notable investments into Prime Video are Thursday Night Football – a package that costs $1 billion annually – and “Lord of the Rings: The Rings of Power,” which cost around $60 million per episode in its first season. The show’s second season is in the works, but a release date hasn’t been announced thus far.

Most of the major streamers now have some kind of ad-supported tier. Netflix and Disney+ in late 2022 both introduced lower-cost plans with ads. Prior to that, services like Hulu, HBO Max (now Max) and Paramount+ already offered ad-supported options.

Amazon also has a separate free ad-supported streaming TV (FAST) service, Freevee, which users can access through Prime Video or via a standalone app, if they aren't subscribed to Prime.

With Prime Video joining the bandwagon, Apple TV+ is one of the last big-name streamers that’s completely ad-free. But that may change in the future, as Apple in February hired Lauren Fry as head of video ad sales.

“We aim to have meaningfully fewer ads than linear TV and other streaming TV providers,” Amazon stated.

Amazon will send Prime members an email several weeks before ads will be launched, explaining how to sign up for ad-free Prime Video.