Amazon (AMZN) is set to introduce limited advertisements on its Prime Video platform in India starting next year. This initiative is part of AMZN’s larger strategy to enhance advertising revenues and support content creation investments, particularly in response to the growing competition in the streaming market.
According to the company, the number of ads shown will be much lower than on traditional TV or other streaming services. For viewers who prefer an ad-free experience, Amazon plans to offer a separate subscription tier, with pricing and other details to be revealed later.
It’s important to highlight that Amazon has successfully launched an ad-supported tier for Prime Video in several countries, including the U.S., U.K., and Germany. Notably, the company anticipates generating $5 billion in revenue in the U.S. this year.
Rising Competition in the Indian Streaming Market
The introduction of ads on Prime Video comes amidst growing competition in the Indian streaming market. The recent merger between Reliance’s Jio Cinema and Disney (DIS) could create a major competitor, prompting other streaming giants to intensify their efforts.
By introducing ads, Amazon intends to increase its investment in content specifically designed for the Indian audience. Additionally, the company seeks to grow its Prime membership base in India, which has experienced significant growth in recent years due to the platform’s popularity and appealing content options.
What Is the Price Target for AMZN?
Turning to Wall Street, AMZN has a Strong Buy consensus rating based on 45 Buys and two Holds assigned in the last three months. At $224.38, the average Amazon price target implies a 20.06% upside potential. Shares of the company have gained 23% year-to-date.
