An ad-supported programming service would diversify Amazon out of the saturated SVOD market and place it into an emerging area of free-to-consumer platforms-a position now being staked out by Facebook and its recently launched Watch platform.
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Amazon is developing free-to-consumer, ad-supported video service, Ad Age reports, citing unnamed ad agency sources.
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So, why would Amazon offer a free version of a service it already collects money from? It sounds like the new service could be a separate entity from Amazon's current Prime Video service, rather than simply the same service with commercial interruptions. "Amazon is talking about giving content creators their own channels and sharing ad revenue in exchange for a set number of hours of content each week", an anonymous source told adage.com. With all of this new competition hustling about, Amazon is trying to attract as big of a share of the viewing audience as possible, and pivoting toward a free ad-supported platform might be just the way to do it. The idea of using ads during streaming content would be very similar to how, well, using ads during mainstream broadcast television works-but considering Amazon's got so much data on its customers, it may be able to target these ads much more hyper-specifically than a terrestrial television network is able to. They get things like free two-day shipping and access to a large library of video streaming content. By creating a free, ad-supported streaming service, of course.
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"Amazon is doubling down on its own media and content, and thinking about how to make that available", said one advertising exec that spoke with AdAge. In the past, this meant paying $99 for a annual subscription, but now Amazon has a $10.99/month option for those who don't want to pay all at once, as well as a Prime Video subscription that is $8.99/month. A freemium model could prove a fruitful way to grow its viewer base.