Amazon Prime Video is taking a page from its rivals, Netflix and Disney+, by focusing on expanding its advertising efforts across its television shows and movies in 2025. Kelly Day, head of Prime Video International, revealed that Amazon has been investing heavily in content, including live sports rights, to compete with the likes of Netflix, Warner Bros. Discovery, Paramount+, and Disney+. This shift towards advertising comes amidst the popularity of ad-supported tiers offered by these competitors.
Analysts at Citi anticipate over $5 billion in “high-margin advertising revenue” from Prime Video, based on the success of these ad-supported models. Amazon’s digital advertising business has already witnessed significant growth, with revenues increasing by 20% to $12.8 billion in the second quarter of 2024.
Day further highlighted Amazon’s potential to reach approximately 19 million monthly British viewers, representing about a third of the population, making the UK a prime target for advertisers. Globally, Prime Video’s ad-supported tier boasts a reach of 200 million viewers, with over half of them in the US.
Amazon is also exploring innovative ad formats such as interactive and “shoppable” ads for Prime Video. These interactive elements could offer viewers the opportunity to engage with products directly within the streaming experience, potentially boosting brand awareness and sales.
Netflix, whose stock has surged by 89% in the past year, has seen strong growth driven by factors such as its content slate, which includes popular titles like “Squid Game” and NFL games. The company also recently announced a price hike, further boosting its revenue.
According to Statista, in the second quarter of 2024, Amazon Prime Video and Netflix held a 22% market share each in the US subscription video-on-demand (SVOD) market. While Netflix boasts 247.2 million subscribers, Amazon Prime Video has 200 million subscribers, followed by Disney+ with 150.2 million subscribers, according to a Forbes report.
Disney’s stock has also seen a significant rise, climbing over 18%. The company’s upcoming blockbusters, including “Inside Out 2” and “Deadpool & Wolverine,” are expected to further fuel the growth of its streaming service.
Amazon’s stock has climbed over 48% in the past year, attributed to the success of its e-commerce and cloud businesses. The company’s foray into the advertising space is likely to further enhance its already strong revenue streams.
As Amazon Prime Video dives into the advertising arena, it will be interesting to see how it balances its ad-supported offerings with its existing subscription-based model. The company’s ability to leverage its massive audience and engage viewers with innovative advertising formats will be crucial in determining its success in this competitive landscape.
