Good news for video marketers fretting that Netflix and other ad-free subscription services will take all the TV viewers: The future of TV will be ad-supported. As a follow-up to yesterday’s news from Forrester that the online video ad market is exploding, today word leaked that Amazon is creating an ad-supported streaming video offering.
While it’s early days for this, insiders who have been pitched by Amazon say the service is a complement to Amazon Prime Video (not a competitor), and will be available to viewers using Amazon Fire TV devices. Amazon is especially looking for lifestyle, travel, and cooking shows, as well as back catalogs from movie and TV studios.
Amazon is hardly alone in this area. Crackle and Vudu offer ad-supported programs, and Roku recently got into the area in a big way with free on-demand shows and movies, as well as live news. Ensuring viewers see that content, Roku tweaked its interface so “featured free” content is easy to spot.
To woo studios, Amazon is reportedly offering to share audience info and ad revenue. Studios would be rewarded for contributing popular programming, as payments would be influenced by watch time. Studios would be obligated to share a set number of hours of programming each week.
While some see an ad-supported offering as a way for Amazon to attract paying customers who might upgrade to Amazon Prime, Amazon doesn’t need to convert them to have a hit. Serving addressable TV ads on premium brand-safe content to a largely younger audience is a win all by itself. The hurdle is getting programs that people want to watch. The field is so competitive that older reruns won’t find much demand.
“Amazon needs broadcast-quality ad inventory if it’s going to attract the kind of upfront dollars that flow to television and compete with networks,” said one ad agency executive quoted by AdAge.