New data from Hub Entertainment Research revealed that most consumers prefer ad-supported video services at lower costs than more expensive, ad-free premium offerings, with Prime Video having the most significant impact of the ad-supported services ecosystem.
With the launch of ads on Prime Video in late January 2024, a significant number of all TV viewers have switched from watching only ad-free content to watching ad-supported videos, Hub noted.
The share of consumers watching only ad-supported content increased 10 percentage points from the fourth quarter of 2023, while the group watching only ad-free content decreased by nine.
The firm noted that historically, streaming services that launched with an ad-supported tier have had the highest level of ad-friendly subscribers, and services that introduced a new ad-supported subscription or automatically assigned consumers to the option without ads had the lowest level of ad-accepting subscribers.
By opting to include existing subscribers in the ad-supported option, Prime Video has immediately become the leader, with more than eight in 10 subscribers using the ad-supported service.
“Practically overnight, Prime Video dramatically transformed the video advertising ecosystem,” said Mark Loughney, senior consultant at Hub. “Suddenly, advertisers have the ability to reach tens of millions of viewers on a single platform, with strong targeting capabilities and vast retail capabilities. “Amazon has immediately launched itself into ‘must buy’ territory for advertisers and media agencies.”
