According to the Wall Street Journal, which cites "people familiar with the situation," Amazon's decision is all about — you guessed it — money. The company is apparently increasingly focused on ad revenue, and advertisers are apparently looking to slap their promotions inside of Amazon's shows (such as The Boys and The Marvelous Mrs. Maisel), which have gone this long without ads.
Currently, Prime Video is available as a feature of Prime ($14.99 per month, $139 per year), and is sold on its own at $8.99 per month. This tier's pricing is not known at this stage, though the ad-supported streaming services that are below $9 per month (Peacock and Paramount Plus) cost $5 per month.
Analysis: Amazon's trying to have its cake and bill you, too
What about Amazon Freevee? The company already has an ad-supported streaming service, but that tier is decidedly gratis. Ad-supported Prime Video would exist in a new lane, giving Amazon the best of both worlds: charging you a monthly fee and getting money from the ads it sells.
And, given the increasing popularity of ad-supported streaming services — the ad-supported Disney Plus Basic and Netflix with ads debuted last year, Max gained an ad-supported tier in 2021, back when it was HBO Max — we're not entirely shocked.
The world of streaming services, as best evidenced by Netflix's 2022 subscriber growth issues and the Netflix password-sharing crackdown, is trying to find every single subscriber it can, and make as much money from them as possible.
Amazon's goal here, as the Journal's story claims, is to help "cover the costs of creating its shows and movies" such as the $715 million it dropped on Lord of the Rings: The Rings of Power's first season. Unfortunately for Amazon, it may not have seen a great return on investment, as the series reportedly only had a 37% completion rate in the US. To contextualize that, sources talking to The Hollywood Reporter said that 50% "would be a solid but not spectacular result."
Maybe, just maybe, Amazon's studios could consider smarter spending? Maybe boot up rival Max and watch Moneyball.