The Information reports that “as Amazon gears up to run ads on its Prime Video streaming service early next year, company executives are asking advertisers to commit to spending significant amounts of money on the service in 2024. The requests, which ad executives say are more aggressive than what Netflix asked for when it launched an ad-tier last year, signify Amazon’s confidence in the advertising prospects of Prime Video.”
According to the story, “In meetings with one big global ad firm, Amazon executives asked for initial commitments for 2024 of more than $100 million, one ad executive said. In meetings with a smaller ad firm, Amazon asked for more than $50 million in commitments, a second executive said. Both executives said Amazon’s requests were aggressively high. One noted Amazon was asking for what their firm now spends annually on Hulu, the biggest subscription streaming service in terms of ad sales in the U.S. … Amazon told ad executives it expects Prime Video to offer advertisers a bigger audience than Hulu. The Disney-controlled streaming service generated more than $3 billion in advertising revenue last year … If Amazon captured ad spending on a scale equivalent to Hulu, it would increase its ad revenue by 8%, from $37.7 billion last year.”
KC’s View:
Sounds like Amazon is looking for more than a new revenue stream – it seems to be anticipating something more akin to a big river.
I don’t know if Amazon is right in its expectations – after all, if memory serves, it overestimated the audience it would get for its first year of Thursday Night Football and had to write some checks to advertisers that served as make-goods.
I still think that Amazon is wrong to be charging customers more ($3 a month) if they want the ad-free service they’ve been getting all along. And I still believe that this reflects a changed attitude at Amazon, where the business no longer is quite as customer-centric and the relentless focus is revenue, revenue, revenue.
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