Amazon’s recent announcement about introducing advertisements on its Prime Video streaming service in 2024 is making waves, and it’s not just about revenue for the e-commerce giant. But what’s the impact on the millions of Prime Video subscribers, especially those in Malaysia?
Why Amazon is Bringing Ads to Prime Video
Amazon has been heavily investing in video content, securing exclusive rights to popular shows and movies while also producing its own original series and films. In 2020 alone, Amazon’s spending on video and music content exceeded $11 billion, up from $7.8 billion in 2019.
Despite having over 200 million Prime members globally, Amazon’s video streaming business hasn’t been profitable. The Information reports that Prime Video incurred about $5 billion in losses in 2019, with more expected in the coming years.
To offset these losses, Amazon is following the footsteps of platforms like Hulu and Peacock by introducing ads to Prime Video. The goal is to tap into advertisers looking to reach its extensive and dedicated audience, potentially generating substantial revenue.
Impact on Prime Video Users
While Amazon hasn’t unveiled the specifics of its ad strategy, it’s probable that they’ll introduce different subscription tiers for Prime Video users, akin to Hulu’s model. For instance, Hulu offers three plans: a basic plan with ads for $5.99 per month (around RM25), an ad-free plan for $11.99 per month (approximately RM50), and a live TV plan with ads for $64.99 per month (about RM270).
Amazon might offer a similar range of choices for Prime Video users, catering to their preferences and budgets. This could include a basic plan with ads for Prime members already paying $119 per year (about RM495) for the full Prime package, which includes free shipping, music streaming, and more. Alternatively, there could be a no-ads plan for Prime members willing to pay extra for an uninterrupted experience. They might also create a separate plan for non-Prime members who want access to Prime Video with or without ads.
The introduction of ads on Prime Video will impact users differently. Some may accept ads if they are relevant and unobtrusive, provided they can still access Prime Video’s extensive content library. Others might opt for an ad-free experience, especially if they value privacy and convenience. Some might even consider switching to other streaming services that offer better quality and value, such as Netflix, Disney+, or HBO Max.
Implications for Malaysian Prime Video Users
For Prime Video users in Malaysia, this change could have specific implications. Firstly, Malaysian Prime Video users currently pay RM14 per month (around $3.36), significantly lower than the U.S. price of $8.99 per month (about RM37). This is because Amazon hasn’t launched its full Prime service in Malaysia yet, offering Prime Video as a standalone product.
With Amazon introducing ads on Prime Video in 2024, it may adjust its pricing strategy for different markets based on demand and competition. This could mean Malaysian Prime Video users might have to pay more in the future, either to avoid ads or to access the same content as before.
Secondly, Malaysian Prime Video users may encounter different types of ads, depending on local advertisers’ availability and relevance. Local brands or businesses catering to Malaysian preferences, like e-commerce platforms, food delivery services, or travel agencies, might become more prominent. Alternatively, global brands may use this opportunity to expand their presence in Malaysia, promoting tech products, entertainment, or luxury goods.
Lastly, reactions to seeing ads will vary among Malaysian Prime Video users, based on their expectations and satisfaction levels. Some may welcome ads if they feel they’re getting a good deal for the service and find the ads useful or entertaining. Others might be annoyed if they think they’re paying too much or find the ads intrusive. Some may remain indifferent, depending on their investment in the service or available alternatives.
Conclusion
Amazon’s decision to introduce ads on Prime Video in 2024 is a significant move that will affect its global video streaming business and its diverse customer base. For Malaysian Prime Video users, this could mean potential price adjustments, exposure to different ads, and varying sentiments towards the service. Whether this change is viewed as positive or negative remains to be seen, but it’s certain that Prime Video’s landscape will undergo transformation.