The two giants of the OTT industry are also taking big leaps against each other. Netflix being the leader in the streaming field introduced ads in its plan. Although Prime Video was facing struggles, it soon emerged as a worthy competitor.
Amazon.com has made a big move that is impacting Netflix’s advertising plans. Netflix, known for its streaming services, is now charging less for ads and trying out new ways to show products in its shows to keep growing its ad business, which is facing more competition.
Earlier this year, Amazon changed its Prime Video service. Now, all Prime Video users see ads unless they pay an extra $2.99 a month to watch without ads. This change means Amazon has a lot of ad space available, which is affecting how Netflix and other streaming services, like YouTube and TV networks, negotiate with advertisers. These companies are now trying to sell ad time for the upcoming TV season, a process called the “upfronts.”
Because of Amazon’s move, ad prices are dropping for everyone.
Netflix is currently asking some brands to pay about $29 to $35 to reach 1,000 viewers, which is less than the $39 to $45 they charged last summer. This new rate is closer to what Amazon is charging, and advertisers are pushing for even lower prices.
Amazon has said its ad-supported Prime Video service reaches about 115 million viewers in the U.S. each month. In comparison, Netflix’s ad tier reaches 40 million viewers globally each month, up from 23 million in January.
Despite Amazon’s reach, Netflix is still popular because its shows often generate more buzz and are more frequently watched, according to Nielsen ratings.
Thus, this is a difficult time for Netflix. Prime Video is playing through the resources of Amazon and that is affecting the overall ad market for streaming platforms. Let’s see what Netflix does to tackle this situation.
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