Amazon Prime Video will join streaming rivals in rolling out ads and introducing a higher-priced ad-free tier next year, as the industry slows subscriber growth since the pandemic.
The US tech giant said on Friday that the ads will be introduced in the US, UK, Germany and Canada in early 2024, followed by France, Italy, Spain, Mexico and Australia later in the year.
Amazon’s ad-free tier will cost an additional $2.99 per month in the US, where a Prime subscription is currently $14.99 per month, or $139 per year. Pricing for other countries will be determined later, the company said.
Netflix and Walt Disney have taken similar steps, hoping that increased ad revenue will slow down subscriber growth.
However, growth has been slow for ad-supported projects. To boost subscriptions to the tier, Netflix has scrapped its basic ad-free plan in the US and UK, while Disney has raised prices for its ad-free tiers.
Amazon already shows ads on live event content like the NFL’s Thursday Night Football, a practice that would continue even if a subscriber paid for an ad-free plan, the company said.
The company said it plans to have fewer ads than traditional TV and other streaming providers, adding that it won’t raise prices for its current Prime membership plan in 2024.
The online retail firm doesn’t break out Prime membership numbers. But Insider Intelligence estimates that Amazon Prime is the third-largest video streaming platform in the U.S. with 157.3 million subscribers, trailing only YouTube and Netflix.
After two disappointing earnings reports, Amazon reported better-than-expected quarterly sales growth and profit in August, driven by improvements in its two main growth engines, e-commerce and cloud computing.