Amazon Prime Video is forecast to generate $2 billion in incremental launch revenue in its first year alone.
According to Omdia analysis, the revenue is in addition to that already generated by the sale of advertising slots during live sports broadcasts on the service.
Commenting on Amazon Prime’s entry into the ad-supported video market, Matthew Bailey, Omdia PrincipalAnalyst said: “The forecasted global revenue of over $2bn for Amazon’s ad-supported Prime Video tier in 2024 indicates considerable growth potential for the streaming platform and reflects Amazon’s efforts to diversify its revenue streams beyond subscription fees.
“A significant factor contributing to Amazon’s success will be their capability to provide closed-loop attribution and the inherent advantage of having all their users ad-addressable by default. Amazon has already experimented with directly shoppable ad formats, and this would enhance their ability to monetize their platform even more.”
A key difference between Prime and other streamers that have introduced ads into their content is that Amazon subscribers have to opt out – for a £2 per month supplement – rather than opting in at a lower price.
Omdia’s research also considers the introduction of new services by Amazon’s ad-supported Prime Video, including shoppable TV. This feature allows viewers to directly purchase products they see in shows or movies, creating a new avenue for e-commerce within the streaming platform.
