Amazon introduces advertising on Prime Video: financial experts worried

Amazon introduces advertising on Prime Video: financial experts worried

According to a report by www.tagesschau.de,

Amazon plans to integrate advertising into its Prime Video streaming service, which will mean that users will have to pay additionally from February 5th to be able to watch films and series ad-free. This has led to a lawsuit by the Federal Association of Consumer Organizations because the advertising is being imposed without the consent of the users, which is viewed as a significant change to the contract. Amazon says it shows “significantly fewer ads than linear TV and other streaming TV providers” and promises that no ads will appear in rented or purchased content.

Introducing advertising on streaming services is a new trend in the market. Other providers such as Disney or Netflix have already introduced advertising-financed subscription models. Amazon argues that this is necessary to continue to invest in attractive content and to increase these investments in the long term. The competition in the streaming market is growing, which means that many customers pay attention to the price and may subscribe. According to a streaming study by the management consultancy Simon-Kucher from 2023, streaming users are turning down the red pencil because they want to save and find the number of existing subscriptions to be too high.

The introduction of advertising to Prime Video could have a significant impact on the market as customers may switch to alternative streaming services that offer ad-free subscriptions. This could further intensify competition among providers. The lawsuit by the Federal Association of Consumer Organizations could also lead to a precedent requiring user consent to be obtained for significant contractual changes, which could potentially affect the entire streaming market.