Amazon is spruiking competitive CPM rates for the launch of its Prime Video advertising tier, which is scheduled for July.
Mediaweek understands the e-commerce giant is looking for launch partners to come on board for the initial launch before opening the platform up to all advertisers from Q4 this year.
Amazon is understood to be following the positioning it adopted for its US launch last week, with competitive CPM rates and a focus on its significant reach to attract advertisers to its new advertising offering.
Media buyers told Mediaweek the CPM rates are priced to compete with BVOD rates and are pitched in the low-to-mid-30s. However, others suggested it could stretch to the low 40s, “depending on how premium it is”.
The pricing showcases the strategy that Amazon is taking with Prime Video by pitching it against all types of video, significantly BVOD, rather than purely competing with SVODs, such as Netflix or Disney+.
The strategy is in stark contrast to the premium positioning that Netflix adopted when it launched its ad tier to market in 2022. The streaming giant adopted CPM rates in the high 50s and 60s, however, it struggled with inventory and was forced to revise its rates to appease advertisers. Netflix rates are now understood to sit in the $40s.
The latest subscriber figures reveal Prime Video secured 15.5% of new subscriptions from Australian households between October and December, according to Kantar data published by Capital Brief. The data showed Prime Video grew from 12.9% the previous quarter, leading the platforms ahead of Binge (11.4%), Paramount+ (9.6%), Netflix (8.9%) and Apple TV+ (8.4%).
The data revealed that all of the platforms increased subscribers – 100,000 households overall – the findings run counter to the widely speculated churn that was anticipated as consumers cut costs.
Amazon Prime Video is included with the overall Prime subscription package, with all subscribers to receive the ad tier when it launches.
Amazon declined to comment on the story but confirmed its previous statement that: “Ads in Prime Video content will be introduced in the U.S., U.K., Germany, and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year.”