In a significant shift in the streaming ad market, Amazon.com Inc. (NASDAQ:AMZN) has caused a major disruption for Netflix Inc. (NASDAQ:NFLX) by introducing an ad-supported version of its Prime Video service.
What Happened: Amazon’s move to convert its entire Prime Video subscriber base to an ad-supported version has led to a significant decrease in ad prices for everyone, including Netflix, Alphabet Inc‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube, and TV networks, reported The Wall Street Journal. This has impacted the negotiations these platforms are having with advertisers for the upcoming TV season.
Netflix has responded by reducing its ad rates and introducing new offerings, such as product placement, to attract advertisers. The streaming giant is reportedly asking some brands to pay between $29 and $35 for reaching 1,000 viewers, a significant decrease from the $39 to $45 it charged last summer.
Amazon’s ad-supported Prime Video tier has an average reach of 115 million monthly viewers in the U.S., while Netflix’s ad tier reaches 40 million global monthly active users.
Earlier this year, ...