Amazon Prime to generate more than $2 billion in incremental ad revenue in 2024: Omdia

After the introduction of Amazon's ad-supported Prime Video service in January, fresh analysis from Omdia, an analyst and consultancy firm, indicates that the streaming platform is poised to generate over $2 billion in additional ad revenue in 2024, the year of its launch. This will add to the revenue already generated by the sale of advertising slots during live sports broadcasts on the service.

The primary distinction in Amazon Prime's advertising strategy compared to other platforms like Netflix lies in the subscription model. Amazon will place all current users into the ad-supported tier of its service, giving subscribers the option to pay extra to view without advertising. In contrast, Netflix users start in the non-ad-supported tier and can opt for a lower-priced service that includes advertisements.

Matthew Bailey, Omdia Principal Analyst, said, “The forecasted global revenue of over $2 billion for Amazon's ad-supported Prime Video tier in 2024 indicates considerable growth potential for the streaming platform and reflects Amazon's efforts to diversify its revenue streams beyond subscription fees.

“A significant factor contributing to Amazon's success will be their capability to provide closed-loop attribution and the inherent advantage of having all their users ad-addressable by default. Amazon has already experimented with directly shoppable ad formats, and this would enhance their ability to monetise their platform even more.”

Omdia's research also takes into account the rollout of new features by Amazon's ad-supported Prime Video, such as shoppable TV. This functionality enables viewers to instantly buy products they encounter in shows or movies, paving the way for e-commerce integration within the streaming platform.

Bailey said, “Omdia expects more partnerships between prominent retailers, broadcasters, and online video platform owners as they look to compete with Amazon. These will range from data-sharing partnerships to enable commerce-led video advertising measurement and targeting through to direct retailer integration with video services.”

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