Commentary

Amazon Cranking Up More Commercial Time On Prime Video: Good News?

Amazon is raising the bar when it comes to advertising inventory for its ad-supported Prime Video option -- by adding inventory.

This will make legacy TV network executives who have sister premium streaming platforms very anxious.

Vice President of Amazon’s Prime Video International Kelly Day, who oversees the streaming video business in global market, told the Financial Times there would be more ad breaks for brands to buy in 2025. 

This appears to be a doubling down on Prime Video's original efforts with advertising starting in January of this year -- which flooded the TV/streaming ad marketplace, driving down near-term scatter TV marketplace pricing deals as well as weakening upfront ad price deals.

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Why the move? So-called “churn” -- the measure of departing subscribers -- on Prime Video has “been much, much less than we anticipated,” according to Day. She was referencing existing subscribers of ad-free Prime Video: “We haven’t really seen a groundswell of people churning out or canceling.”

All this comes as another report says Amazon pulled in $1.8 billion at an upfront event in September for Prime Video -- way ahead of company estimates.

And that’s not all. Justin Post, media analyst for Bank of America, wrote earlier this week that Prime Video ad revenue is projected to explode. “If we assume Amazon generated more than $1.8 billion in upfronts, and next year’s upfronts are even bigger than this year, we [estimate] Amazon could be on track for $3.5 billion to $4.0 billion in 2025 Prime Video advertising revenue.” 

Post says this would be 5% to 6% of Amazon’s entire 2025 advertising revenue. According to one Emarketer estimate, Amazon will top $67 billion next year.

All that would mean the obvious: Harder times ahead for those still on-the-fence premium streaming services. That could include not just streamers like Paramount+, Peacock, Max, Disney+ but also Netflix, which currently has a smaller but growing ad-sales operation.

On the other side, all this sounds like great news for major and mid-sized advertising brands everywhere -- giving brands all the streaming inventory they need at modest pricing. 

But walled-garden digital media -- with limited access to real data transparency -- remain an issue for some platforms. And premium live, linear TV inventory still has stable -- although slowly eroding -- value. Working with both and synthesizing results can be tricky.

Do we even need to bring up complex measurement issues for the whole TV/streaming ecosystem?

The dust-up continues... with cloudy conditions.

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