Most UK consumers ‘unwilling’ to pay more to avoid ads on Amazon Prime Video
Nearly three-quarters (73%) of UK consumers are “unwilling” to pay extra to opt out of advertising on Amazon Prime Video, according to new research.
Amazon Prime members in the UK will be automatically opted in to an advertising-funded tier for the video service from today and will have to pay an additional £2.99 a month for an ad-free experience.
Mobile ads company LoopMe surveyed 2,296 UK adults between 26 and 31 January to understand their attitudes towards advertising on Amazon’s Prime Video streaming service.
Nearly a quarter (24%) said they would keep their Prime subscription as they “did not mind ads” and an additional 11% were willing to keep their subscriptions “if the ads were relevant”.
By age demographic, those aged 25-34 were most likely to pay for an ad-free experience, with 15% willing to pay the additional fee.
Nearly four in 10 (38%) said they would keep Prime Video with ads if they could still use other Prime services, such as one-day delivery and Kindle, and 82% felt Prime was “good value for money”.
More than three-quarters of respondents (76%) said they had no plans to cancel any of their subscription services in the next three months, with 75% of those aged 18-24 reporting they would not part with any of their subscriptions.
Not likely to attract new subs
“Amazon seems to have called people’s bluff by introducing ads to its basic tier, knowing people would not mind ads enough to pay extra,” commented Sarah Tims, assistant vice-president, marketing, at LoopMe.
She said the changes “might do little” to attract new subscribers, but the value of Prime’s additional services is “a certain advantage” compared with other streamers.
Tims explained: “While Amazon might not replicate Netflix’s success with increased sign-ups to its new ad tier, there’s little risk that it will lose existing subscribers. So, even if the move might not increase user revenue from the paid tier, the streaming giant will likely see the forecast billions in advertising dollars.”
Kantar’s latest Entertainment on Demand survey found Amazon Prime Video had 9.7m subscribers in the UK in Q4 2023, compared with 9.1m in Q3 and 9.6m in Q4 2022.
It took second spot in share of new subscriptions in the UK in Q4, with a 16% share, after Apple TV+.
Seamus Brennan, director of partnerships at digital marketing agency Kepler, told The Media Leader: “Amazon is the first AVOD platform to automatically opt in users to their ad-supported tier and will likely have a far bigger impact than Netflix and Disney+ due to the sheer potential scale of the 200m subscriber audience worldwide — all of which is being shifted to ad-funded viewing with an opt-out as opposed to offering a tiered approach.
“This puts the onus on the user to pay more for their existing offering, which is likely to see them remain on the ad-supported tier as seen in the consumer research. With the added benefits of Amazon Prime retail and a UK Prime subscriber base of 13m [households], the initial uptake will be much stronger than seen on previous launches from Netflix, where scale was an issue for advertisers.”
Brennan added that reported CPMs were “much more affordable” than Netflix’s launch and offers access to a wealth of shopper data within Amazon’s ecosystem, as well as a large pool of customers across high-quality video content.
He said: “This should be seen as a win-win for viewers and advertisers to keep costs down in a world of endless subscriptions and a great opportunity for advertisers to place their messaging in a high-quality, targeted environment.”