Amazon to “Ramp Up” Prime Video Ads in 2025

Despite forcing all Prime Video subscribers to ad tiers in January unless they pay an extra $3 per month, Amazon still hasn't tapped into Prime Video's full advertising potential. Amazon's advertising business still relies mostly on ads that appear on Amazon's website, Amazon CFO Brian Olsavsky told investors in August. In the first full quarter when Prime Video was available with ads, Amazon's ad business grew more slowly than expected in the most recent quarter, with ad sales missing analyst estimates ($12.77 billion versus $13 billion).

That said, ads remain one of Amazon's fastest-growing and highest-margin businesses, and the conglomerate is keen to cultivate it. Amazon has already reportedly exceeded its ad-spending commitment target for Prime Video for 2025.

Amazon has also been competitive on ad pricing, reportedly offering lower prices than Netflix, while forcing all of its subscribers to ad levels and already creating an early advantage by appealing to advertisers with its e-commerce business.

a fine line

Amazon's ad business is booming and the company has seen minimal setbacks since launching Prime Video with ads, it decided to go further and see how many more subscribers it was willing to carry.

On the one hand, those who have already seen ads on Prime Video can take whatever Amazon's advertising department is willing to throw at them.

Others, however, may feel that they are already paying their dues with the current ad setup. For consumers fed up with streaming tactics like rising prices, library changes and password crackdowns, there's a fine line between an acceptable and disruptive ad. Ad fatigue can also make advertising less effective.

At least for now, ad tiers make business sense for streaming providers, most of which are trying to achieve or maintain profitability. Advertising subscriptions make up 38 percent of the streaming market and represent more than half of new subscriptions per antenna in 2023 and Q1 2024.

As long as people continue to pay for ad subscriptions, streaming providers will look for more ways to use viewers to generate ad dollars. With Amazon's ad load increasing next year, we can expect more streaming services to test how much advertising consumers will accept.