Most Consumers Won’t Shell Out for Ad-Free Amazon Prime Video: Survey
Turns out there’s one thing Amazon can’t sell: an ad-free tier of Prime Video.
Or at least it can’t seem to sell it to very many people. Survey data from CivicScience shared with Variety Intelligence Platform shows less than 10 percent of Amazon Prime members plan to shell out the extra $2.99 per month that will soon be required to watch the tech giant’s streaming service without commercial breaks.
Amazon is launching ads on Prime Video Jan. 29, a first for the decade-plus-old streaming platform and a reversal for one of the last major SVODs not to offer an ad-supported tier. The company has elected to take what one might call the Disney+ approach to pricing: offering the ad tier at its current (ad-free) monthly price and hiking the cost for those who want to continue watching without commercials.
CivicScience surveyed consumers about the impending change first in October, shortly after it was first announced, and again starting in late December, once Amazon confirmed a launch date for ads on the platform. The single largest category of those surveyed, in both cases, said the introduction of ads would likely not impact how often they use the service.
In each survey, however, a combined plurality of respondents said they likely would use Prime Video “somewhat” or “much less” or would cancel their Prime subscription — 51 percent in total in October, 43 percent in the more recent survey.
The drop over the intervening months suggests that, when push comes to shove, fewer users will actually cancel their Prime subscriptions than the survey suggests. Still, it’s clear Amazon should not expect a surge in subscriber fees once the ad tier makes its debut.
About 12 percent of Prime members surveyed overall said they do not even use Prime Video, indicating they mainly subscribe to the membership program for its free two-day shipping feature or other perks. Meanwhile, in both surveys, just 9-10 percent of respondents said they would upgrade to an ad-free subscription.
This reinforces the results of multiple recent polls showing streaming users will put up with ads in exchange for a lower monthly cost. A survey fielded by CivicScience for VIP+ found 56 percent of consumers either don’t mind ads or are unwilling to pay more for an ad-free experience.
Streaming analytics firm Antenna also recently observed a new monthly high for sign-ups to ad-supported SVOD plans in the U.S., with such plans in November accounting for more than half of premium SVOD sign-ups for the first time ever.
In other words, Amazon is hopping on the AVOD bandwagon at the perfect time, as streaming ad tiers are becoming ever more accepted among consumers. And what the tech giant doesn’t rake in from increased subscriber fees, it should more than make up for in ad dollars: Amazon is projected to more than double its CTV ad revenues this year, from about $1.4 billion in 2023 to upward of $3 billion, per an Insider Intelligence forecast.
That doesn’t mean plenty of Prime Video users won’t be turned off by the new presence of ads on the platform, but such is the cost of doing business as streaming video continues its inevitable transformation into a predominantly ad-supported format.
