Amazon could soon have a new weapon in its war against Netflix, as the online retailer is supposedly in the process of developing an ad-supported streaming video service. That would make its offering the Spotify of the video streaming industry, with both a premium and free offering.
The new report comes from AdAge, which suggests that Amazon is already deep in talks with various studios and TV networks to provide content for the service. That would likely be in addition to Amazon’s own in-house content that includes hits such as The Man in the High Castle and Transparent.
Amazon has been extremely bullish in the media market; the company already offers two different tiers of its music streaming service to customers, meaning it’s not all that unrealistic to see two tiers for video streaming. There is likely to be one stark difference between the two, however. That’s because Amazon Music is available without ads to everyone with a Prime subscription, whereas Music Unlimited is a separate upcharge.
This isn’t the first time Amazon has been said to be working on an ad-supported video streaming service. The company was hotly tipped to be preparing such a service back in 2014, although that never came to fruition, so the new rumours should be taken with a pinch of salt.
Things are different this time around, however. Advertisers are gradually losing their ability to get in front of customers as TV viewers increasingly cut their cable subscription in favour of online ad-free services such as Amazon Video and Netflix. This gives Amazon the ability to charge advertisers enough money to cover its deals with outside studios.
It’s not just about getting ads in front of customers, however. Amazon is also supposedly proposing sharing audience data to clients, allowing them to fully understand the demographics they are advertising to.
Amazon has dabbled in ad-supported content before, with the company supplementing its National Football League games with mid-roll ads. This new service should be a lot more powerful for both customers and advertisers, however – with Amazon considering giving content creators their own channels and sharing ad revenue in exchange for a set number of hours of content each week.
It’s not the first time a company has attempted to offer premium content using ads to replace a monthly subscription fee. Voddler has previously attempted a similar service, making all of its premium content available for free, although it soon switched tactics by only making a portion of its content available to non-paying customers. The company’s catalogue included content from the likes of Warner Bros., Paramount, Sony, and Disney, however; proving that content creators are interested in ad-supported models.