Sources familiar with the matter told the Wall Street Journal that Amazon has been holding discussions regarding the new tier for several weeks now, but added that the plans are still in the ‘’early stages’’.
According to the report, the company is also in talks with Warner Bros Discovery and Paramount Global to potentially add their ad-based plans through Prime Video Channels, which allows users to subscribe to streaming services.
The news comes at a time when more and more consumers are switching to ad-supported tiers as a result of the high inflation and interest rates.
While Amazon’s sports coverage already includes ads and certain shows feature product placement advertising, launching an ad-supported plan could give a boost to the company’s advertising revenue, which reached $9.5 billion in the first quarter of 2023.
So far this year, Amazon CEO Andy Jassy announced two rounds of mass layoffs at the company, which impacted thousands of employees.