Prime Video to introduce advertisements on streaming service in Australia

Yet another streaming platform is adding advertisements to its viewing experience, joining a growing trend of ad-based services.

Prime Video is the latest streamer to introduce advertisements on its platform in Australia.

The Amazon-owned streaming giant, which launched locally in 2016, will charge customers an extra $2.99 per month to opt out of ads from July 2.

Ads will be automatically added to existing services at the current rate of $9.99 per month, and will play before and during shows and movies.

Prime Video will introduce ads in Australia from July 2. Picture: Martin BUREAU / AFP

It’s an unsurprising update, with Prime Video already rolling out its ad tier model in the US, UK, Germany and Canada as streaming companies continue to shift their strategies to profitability.

Still, it’s a bitter pill to swallow for consumers who were initially lured to on-demand services thanks to the promise of no ads.

An email sent to subscribers explained the change was necessary to ensure the American-based company – which recorded more than $US590 billion in revenue for the 12 months ending March 31, 2024 – could “continue investing in compelling content and keep increasing that investment over a long period of time.”

Anne Hathaway and Nicholas Galitzine star in Prime Video's latest movie offering, The Idea of You. Picture: KENA BETANCUR / AFP

Further, the company said it would aim to have “meaningfully fewer ads than linear TV and other streaming TV providers.”

Prime Video joins the likes of Netflix ($6.99 with ads, $16.99 without ads) and Binge ($10 with ads, $18 without ads) to introduce advertising on Australian services.

Jeff Bezos and Lauren Sanchez at the premiere of The Lord Of The Rings: The Rings Of Power – one of Prime Video’s biggest shows. Picture: Gareth Cattermole/Getty Images

Elsewhere, Paramount+ is launching its ad-tier locally in June, while Disney+ is rumoured to be rolling ads out some time this year.

In February, Amazon CEO Andy Jassy said Prime Video was forging toward becoming a “large and profitable business” in its own right, with advertising revenue jumping 27 per cent to $US14.6 billion in the fourth quarter of 2023.

“As we made dramatic year-over-year gains in ad sales, we have increasing conviction that Prime Video can be a large and profitable business on its own and will continue to invest in compelling exclusive content for Prime members,” Mr Jassy said at the time.

Popular titles on Prime Video include The Lord of the Rings: The Rings of Power, The Marvelous Mrs. Maisel and Fallout.