Amazon reportedly eyes ad tier for video; WBD, PARA jump on talk of Channels inclusion
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Amazon.com (NASDAQ:AMZN) is reportedly eyeing an ad-supported version of its Prime Video service, cementing a fairly rapid shift of the streaming industry toward embracing the ads that have long supported cable and broadcast television.
The tech conglomerate is also reportedly talking to Warner Bros. Discovery (NASDAQ:WBD) and Paramount Global (NASDAQ:PARA) (PARAA) about adding the ad-based tiers of Max and Paramount+ respectively to its Prime Video Channels roundup offering.
Amazon has been in early-stage talks for weeks, the WSJ
reported, about implementing an ad-supported version of Prime Video, a longtime competitor in the subscription video-on-demand business (though something of a side business as it is included in Amazon's Prime subscription offering).
But Amazon's ad profile has been growing steadily, and it's the third-biggest player in digital ad revenue in the U.S. behind Google (GOOG) (GOOGL) and Meta Platforms (META), the report noted.
Amazon's sports programming comes with ads (including its exclusive coverage of the NFL's Thursday Night Football) and some of its shows feature product placement. And Amazon already runs free ad-supported TV through its Freevee service (formerly iMDB TV).
Amazon CEO Andy Jassy has increasingly focused on profitability of the company's varied businesses, the report noted, and the streaming industry in particular has wrestled with increasingly pricey production of television series and movies.
Meanwhile, Warner Bros. Discovery (WBD) rose 8.5% and Paramount (PARA) jumped 8.3%, both to their session highs, following news that their ad services could enter Prime Video Channels.
That service allows Amazon users to sign up for streaming services in a single stop.