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Amazon will benefit from a new kind of growth model in 2024, thanks to its ad-supported video-on-demand initiative with Prime Video. By the end of the year, Amazon will have transitioned most of its OTT viewers to an ad-supported subscription tier in the US, Canada, Germany, the UK, France, Mexico, and several other major markets.

The most popular individual media service in the US, Netflix, has a limited ad inventory, and several other major time-takers, like Spotify, Disney+, and Amazon Prime Video, are also semi-closed systems.

Amazon debuted a 24/7 shoppable programming through Amazon Live, a free ad-supported TV channel on Prime Video and Freevee. Viewers are able to shop in real time from shows led by brands such as Tastemade and The Bump, as well as stars from 鈥淰anderpump Rules鈥� and 鈥淭he Real Housewives of Atlanta鈥� through an app, streamlining the discovery-to-checkout journey.

The recent rollout of Prime Video ads isn鈥檛 the only contributor to rising competition in connected TV (CTV) advertising鈥攐ther subscription over-the-top (OTT) players are stealing market share. US adults will spend 4.1% less time on Netflix in 2025 than they did in 2021, but they鈥檒l increase time spent by 4.2% with other subscription OTT services, according to our forecast.

So it goes, just for context for folks, in terms of the ranking of where Americans spend their time streaming things, basically watching TV, whether it's streaming or cable or whatever, YouTube's first with 11%, Netflix has eight, then it's Prime Video with three and then... So that's your top three. Then you've got Hulu, Disney+, and Peacock with just over 2%.

And in terms of CTV, that slice is just going to keep growing, and I think when we do this next year, it'll probably be a bigger part of the pie and it's going to lean more toward the Prime Video side because of rolling out ads across all of that platform, not just the NFL ads they've sold.

Our latest forecast and exclusive consumer surveys highlight the most compelling omnichannel opportunities for fashion brands, retailers, and marketers.

It also shows that streamers see Amazon鈥檚 Prime Video and its new ads as a threat. 鈥淐ompetitors are becoming collaborators,鈥� in order to get leverage over Amazon and its sports content, Zucker said. 5. There鈥檚 no 鈥榥ew normal鈥� for advertising. Don鈥檛 get too comfortable thinking things have returned to normal following years of pandemic disruption, Kohl warned.

Ad-supported tiers have entered the scene on Netflix, Disney+, Max, and, most recently, Amazon Prime Video. On platforms where growth is slowing due to high user penetration, password-sharing crackdowns combined with lower-priced ad-tier offerings can boost subscriber numbers, a strategy that鈥檚 been successful for Netflix. And platforms have much to gain with more eyes watching ads.

They've introduced prime video advertising, so all three of 'em are really having strong years. Now the one that's I'd say the most surprising is Google's because Google has, there's been a lot of discussion on the impact of generative AI on search that hasn't appeared yet. It hasn't really hit Google's bottom line in any way yet.

Google, for instance, recently added a YouTube app in Android Automotive, and Amazon Fire TV and Prime Video are available in some passenger seat screens. Car companies such as Tesla, BMW, and Lexus have also introduced games accessible in stationary cars. More sophisticated entertainment systems will allow individual control over content on screens. Car commerce starts to appear.

Danny, let's talk about one of their competitors because Amazon is launching its ad-supported tier of its Prime Video streaming service a year after Netflix did the same. We're going to talk a bit about the Prime Video streaming ad tier in tomorrow's episode in the story of the week for the weekly listen, but I wanted to look at the Netflix angle in this episode.

The Prime Video part is just one facet. They have the operating system with Fire tv, we include Twitch stuff on there. If it's at least shown on a television screen, freebie still exists. We'll see if it just gets folded into Prime video. But there's a lot going on with Amazon. Yeah. Marcus Johnson (16:35):. Alright folks, that's all we've got time for today's episode.

Amazon will continue to take advantage of the retail media opportunities that arose with the rollout of its new ad-supported tier on Prime Video.

Grocery is set to become the largest US ecommerce category by 2026.

For example, Instacart is working with Peacock, Walmart has Paramount+, and Amazon of course has its own prime video service. The question is what will the streaming bundle look like?

Netflix, Amazon Prime Video, Disney+ and others have all raised prices and increased ad loads in 2023. But for YouTube, raising premium pricing and changing ad loads are different. YouTube is the de-facto video platform of the internet, and users who have spent the last decade or more customizing their experience and using YouTube for free won鈥檛 be eager to pony up.

While SVOD services like Netflix, Prime Video, Disney+, and Apple TV+ have captured audiences for years, the launch of AVOD options like PlutoTV (December 2022 release in Canada) and tiered pricing from SVODs has expanded addressable audiences for advertisers. Once blocked from SVOD鈥檚 captive viewership, advertisers can now use ad units targeting a broader selection of video audiences.

Amazon introduced ads to its Prime Video streaming service this year, creating an audience of 130.4 million ad-supported viewers, per our forecast. While Amazon lacks the store footprint and grocery business of competitor Walmart, it remains the dominant RMN in the US. Walmart: Last year we said Walmart was working its way up the retail media ladder, and this year it certainly has put in the work.

鈥淏ut its recent rollout of Prime Video ads and a new ad-free subscription tier is a big way for it to beef up its ad offerings.鈥�. What鈥檚 interesting:. New AI-powered tools are being released to improve the Amazon customer experience. The mobile app, for example, uses AI to answer shoppers鈥� product questions based on reviews and listing information.

Apple TV+ and Amazon Prime Video were exempt from Kilar鈥檚 evaluation, since entertainment is not Apple or Amazon鈥檚 main revenue source. As platforms consolidate, they鈥檒l wall off content that is currently available across companies. Paramount+, for example, is 鈥渟till an arms dealer to others,鈥� according to our analyst Ross Benes, speaking at the 鈥淎ttention! Trends and Predictions for 2023鈥� summit.

Online shopping is popular across all demographics, but the where and how differs by age, culture, and interests. Current purchasing behaviors can help retailers and brands target digital shoppers and anticipate new trends.

Amazon, Costco Wholesale, and other retailers now face an uphill battle to win recurring revenues in the era of subscription fatigue.