Prime Video ad tier to include ‘meaningfully fewer ads’ in July launch

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16.6% of VoD households are choosing a cheaper ad-supported plan, compared to 9.2% a year ago.

Prime Video will launch its ad tier option for subscribers in Australia on 2 July 2024. 

For subscribers who want to avoid ads, members will need to pay an extra $2.99 per month on top of their current subscription. Members who do not upgrade and stick with their current plan will see ads inserted into their shows and movies.

Prime Video has not revealed how many ads would be played while streaming a film or show, but said in a statement that “we aim to have meaningfully fewer ads than linear TV and other streaming TV providers.”

In an email to local subscribers this week, Prime Video said: “This will allow us to continue investing in compelling content and keep increasing that investment over a long period of time.”

Prime Video increased its prices last year when it moved its monthly plan from $6.99 to $9.99 and its annual option from $59.99 to $79.99. The introduction of the ad tier will also apply to subscribers on annual subscriptions who will need to pay the extra monthly fee to avoid ads. 

Prime Video is the latest streaming service to introduce ads, following in the footsteps of its competitors Binge, Netflix, Paramount+, and Disney+. 

Netflix already offer an ad-supported tier which costs $7.99 a month, a standard plan with no ads at $18.99 per month, and a premium option at $25.99 per month.

Binge rolled out its ad model in March 2023, adding ads to the basic plan which costs $10 per month. To opt out of ads, subscribers had to upgrade to the standard plan at $18 per month. 

Paramount+ will launch it’s ad-tier in Australia in June. It will cost $6.99 per month for the ad tier, $9.99 per month for a standard membership and $13.99 per month for a premium membership. 

Disney+ has yet to launch its ad tier in Australia but is expected to by the end of the year, as US subscribers have had access to an ad tier since December 2022.

Stan’s parent company, Nine, have continued to stand against launching an ad-tier option on the streaming service.

The launch of a Prime Video ad tier comes as a report from Kantar in April revealed that 16.6% of VoD households are choosing a cheaper ad-supported plan, compared to 9.2% a year ago.

The report stated this is due to consumers fighting high interest rates by looking to trim their discretionary spending on services such as video streaming. 

The report also revealed that 7.8 million Australian households now subscribe to at least one VoD service, with penetration increasing from 74.3% in the previous quarter to 75.2% in Q1. 

See Also: Ad-supported streaming plans on the rise as households battle high interest rates

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