Amazon’s AMZN-Q Prime Video has picked the date when it’ll begin showing commercials on its streaming service in Canada.
Representatives for the company told The Canadian Press they’ve marked Feb. 5, 2024, for the launch of ad breaks within its TV and film programming, which includes action series Reacher and the Mr. Dressup documentary.
The ad tier will now be the default of the retailer’s Prime membership, which includes discounts on shipping. However, subscribers can opt out of commercials by paying an additional $2.99 a month.
The announcement comes as streaming companies look for new ways to boost revenue, which has led many to introduce ad tiers on their cheapest monthly plans while raising the price of ad-free packages.
Prime Video, which first outlined plans to launch “limited ads” in September, says it will screen “meaningfully fewer ads than linear TV and other streaming TV providers.”
Viewers in the United States, where Amazon already operates a free, ad-supported streaming service called Freevee, will begin seeing commercials on Prime Video a week earlier than Canada, on Jan. 29, 2024.
Over the past year, subscription prices have risen at nearly every major TV streaming platform. Some companies have pushed up their monthly rates while others took a more covert approach by reworking their service packages with a price hike built in.
A study from Convergence Research Group, a Victoria-based consultancy firm, found that, in 2022 and 2023, subscription prices rose in Canada by an average of 12 per cent a year at the 10 most popular streaming companies.
They expect that trend will continue in 2024.
While complaints about streaming costs aren’t entirely new, an increase in negative consumer reaction has swept through the industry, according to data released this month by Statista.
In mid-2022, the German research firm asked global consumers why they cancelled their TV streaming services. Twenty-eight per cent of respondents said they pay for too many services already while 25 per cent blamed the high price of a particular streaming platform.
Sentiments such as these have pressured the major streaming platforms to find ways to stem the outflow of cancelling subscribers, known in the industry as “churn.”
But instead of merely lowering prices, many introduced ad-supported tiers that often cost customers less but guarantee the company a steady revenue flow from selling space for commercial breaks.