Q: What just happened?

On 12^th Nov, Amazon announced plans to close its free ad-supported video streaming service Freevee, unifying the service’s AVOD titles and FAST channels onto its Amazon Prime Video platform in those countries where Freevee has been active: US, UK, Germany and Austria. Freevee will be phased out in the next few weeks.

The service was initially launched in 2019 and went through several brand iterations, first as Freedive and then IMDb TV, before finally morphing into Amazon Freevee. The move to consolidate Freevee had been rumoured since late 2023, when Amazon first announced plans to introduce ads within Prime Video (from January 2024) and a lot of the internal restructuring had occurred ahead of news of the shuttering of the service.

Although content migration had already started and ~60% of Freevee’s content is already available on Prime Video, the move signifies a major consolidation of Amazon’s video services. Should all content be migrated, the expanded new Prime Video will carry over 30k titles, trailing Tubi and Roku but far outstripping Netflix which offers 9.2k films and TV series in the US, according to Ampere’s title-tracking Analytics service.

Q: What impact will this have on Amazon Prime Video’s subscriptions? 

Besides an enlarged catalogue, the integration of Freevee’s titles will particularly bolster the offering of Prime Video in front of the paywall. Amazon may also continue with AVOD-only commissions,  having had notable success with the likes of the Emmy-nominated Jury Duty.

But while Prime Video can benefit from  Freevee’s existing audience, it can also leverage the free content to encourage customers to upgrade to its subscription plans. It will allow Prime Video to offer non-subscribers a taste of the key content that largely sit behind the subscription paywall, in the form of free first episodes of new seasons.

The upsell opportunity is clear. As of Nov 2024, 44% of Freevee viewers in the US don’t yet subscribe to Prime Video. Ampere’s Q3 2024 Consumer survey (n=4,000, nationally representative of age and gender) shows that 16% of all US Internet users watch Freevee on a monthly basis, which converts to ~50m MAUs (monthly active users).

This suggests that Amazon might therefore have an addressable audience of up to 21.8m US users who currently access only its free content. In the context of the wider subscription market slowdown, this represents a significant opportunity for Prime Video to target and sign-up new subscribers.

Q: How will this change impact Prime Video’s advertising proposition? 

Freevee’s addition will strengthen Prime Video’s advertising proposition. Since January 2024, Prime Video has rolled out ads across 10 markets globally with a distinctive strategy of putting all subscribers on the ad-supported tier by default, with the option to pay an additional $2.99 (or £2.99/€2.99) to opt out.

The addition of Freevee content on the main Amazon Prime Video platform, along with FAST channels, is likely to help bolster engagement and consumption, giving a boost to overall advertising revenue in the long term. Prime Video can also leverage Freevee’s existing advertising partners and its ad technology to enhance ad loads,  and help it configure the ad experience for both a purely free and subscription-plus-ad environment, allowing for a tiered viewer experience.

Q: What will this mean for consumers?

Last but not least, making Amazon Prime Video a single destination with a unified interface will simplify content discovery and accessibility from the consumers’ perspective. By offering an enriched video experience, Amazon Prime reinforces its strategy of keeping consumers engaged within its interconnected service across free, pay, transactional and live streaming. And in an environment where very few video services swim in one monetisation lane, Amazon Prime Video now seem to have all bases covered.