Amazon Prime Video Doesn't Want to Be Just a Default Prime Perk. Here's How the Streaming Service Became a Major Player. Amazon Prime Video became the largest ad-supported streaming service in the U.S. this year.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- Amazon Prime Video became the largest ad-supported streaming service in the U.S. in January after adding ads to movies and shows by default.
- Amazon could see $1.3 billion in revenue this year from streaming ads, according to analysts.
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Amazon Prime Video is more than a side benefit of a Prime membership — Amazon is building out the streaming service to stand on its own.
Jeff Bezos saw Prime Video "as an opportunity to build a media company," not just as an offshoot of Prime, Prime Video head Mike Hopkins told Reuters on Wednesday.
Amazon has worked towards that vision for four years. Prime Video became the largest ad-supported streaming service in the U.S. in January after it started peppering movies and shows with ads by default for its 115 million U.S. subscribers. Prime Video comes with Amazon's $14.99 per month Prime membership; as of January, opting for no ads costs $2.99 extra per month.
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Most subscribers chose not to pay more per month for ad-free viewing — only 15% opted to pay extra. The switch to ads had no impact on Amazon's overall subscriber count, according to a Hub survey, and could bring in $1.3 billion in ad revenue this year and $2.3 billion next year, according to Wall Street research firm MoffettNathanson.
"Virtually overnight, Amazon Prime Video dramatically transformed the video advertising ecosystem," said Mark Loughney, a Hub senior consultant. 
Jeff Bezos. (Photo by Emma McIntyre/Getty Images)
Amazon framed the shift to ads as a way to keep investing in Prime Video. Amazon MGM Studios had its biggest year in 2023 with 68 Emmy nominations for original content like "The Marvelous Mrs. Maisel."
Nielsen's June TV and streaming report found that though Prime Video was not as popular as Netflix and YouTube, it came out ahead of Hulu, Disney+, and Peacock. The Prime Video original series The Boys drew 4 billion viewing minutes in June.
Related: Prime Day Is Reportedly a 'Major' Source of Injury for Amazon Warehouse Workers
