Prime Video India with ads: necessary for growth?

Time of India

15-05-2025

Following a global pattern of streaming platforms exploring hybrid monetisation strategies,
Amazon
Prime Video
has announced its entry into the ad-supported video on demand (
AVOD
) space in India. Starting June 17, 2025, Indian subscribers will encounter limited advertisements during movies and television shows, a change communicated via email and framed as a means to bolster ongoing investment in content. This move is seen by many as a natural progression for Amazon in a market where AVOD is demonstrating significant growth potential.
The 2024 Ormax Media report reveals that SVOD audiences in India comprise 150.6 million people, representing 27.5% of the total OTT universe, while a significant 72.5 percent (396.6 million) access only free content, often exclusively on platforms like YouTube and social media. Notably, the SVOD audience has declined this year, with the overall 21 percent growth of the Indian OTT universe being solely attributed to the expanding AVOD audience segment.
Industry experts have weighed in on this development, with many highlighting its alignment with global trends and the specific dynamics of the Indian market.
Sanjay Trehan
, digital and new media advisor, commented, 'This move is understandable and not entirely unexpected as it follows a global template. India is a cost-conscious market and Amazon needs to generate additional revenue by leveraging its Prime Video audience. Along with innovative CTV ad formats, this is Amazon's attempt to expand its reach and appeal to the bottom and mid tiers of the content consumption market without causing much disruption.'
Nitin Menon
, co-founder and MP at NP Capital, echoed this sentiment, stating that the introduction of advertising was a natural progression for all OTT players. He explained that with rising content costs and the long-term, patient nature of subscription growth in a price-sensitive market like India, leveraging advertising to boost revenues is a logical step. Menon asserted, 'In a price-sensitive market like India, you cannot ignore advertising as a substantial revenue stream, and all OTT platforms would need to incorporate it in some form or another.'
Amazon notified subscribers that limited advertisements will be introduced to Prime Video movies and TV shows from June 17, 2025, explaining this will allow for sustained growth in content investment. They emphasised fewer ads compared to TV and other streaming platforms, with no impact on the current Prime price or requiring any user action.
While the existing Prime membership fee will remain unchanged, Amazon also revealed the introduction of a new optional ad-free add-on for its Prime members. This premium option will be priced at INR 699 annually or INR 129 on a monthly basis and will become available for subscription from the same date, June 17, 2025.
The experts suggest a mixed bag of reactions. While some believe Indian consumers are accustomed to ads and the value of the Prime bundle might cushion the blow, others highlight the risk of alienating existing subscribers who expect an ad-free experience. The success of this move will heavily depend on the ad load, the quality of the ads, and how well Amazon balances revenue generation with user experience in a price-sensitive market.
Menon believes this is a "win-win" as it boosts overall OTT revenue, allowing for greater investment in content and reducing pressure on SVOD growth. While acknowledging a potential initial inconvenience for consumers unaccustomed to ads, he emphasised that the ad strategy and implementation are at the discretion of each OTT platform.
Meanwhile, Trehan elaborated on the potential of ad-supported models, stating, 'AVOD is the way to go and will help expand the premium content market. Having said that, India is a country that defies linear constructs. There are enough takers for an ad-free, clutter-free seamless experience and are willing to pay a premium for it. So, it looks like a smart move to upsell an ad-free experience.' This dual approach, offering both ad-supported and ad-free options, appears to be a strategic manoeuvre to cater to the diverse preferences and price sensitivities within the Indian consumer base.
The evolution of the OTT landscape and shifting consumption patterns are also key factors influencing this decision. He also addressed the monetisation debate, suggesting a coexistence of models. 'I expect both AVOD and SVOD models to grow, as India is a vast and diverse market and content consumption patterns are influenced a lot by local and regional factors. The key, however, is to produce quality and differentiated content that celebrates diversity and builds on cultural sensitivities. Mopping up additional revenue will help Prime Video spend more on generating premium content.'
Shradha Agarwal
, co-founder and CEO of a digital marketing agency—Grapes, believes Prime Video's new strategy will segment its user base into those willing to watch ads for continued access at the current price and those who will pay extra for an ad-free experience, reflecting existing preferences in content consumption.
Agarwal firmly believes in the growth potential of AVOD in the Indian context, asserting, 'AVOD is undoubtedly the most promising avenue for growth in the current OTT market.' She further projects the long-term revenue dynamics, suggesting, 'Ultimately, sponsorship and advertising will likely become the primary revenue generators, potentially accounting for 50-60% of the total, while subscription fees will primarily fund platform development and maintenance.'
Despite the anticipated surge in AVOD adoption, Agarwal acknowledges the continued relevance of subscription-based models, noting, 'Despite the rise of AVOD, SVOD will persist in India. Users are already accustomed to managing multiple subscriptions and will likely continue this habit.'
India's OTT market presents diverse subscription options.
JioStar
offers ad-supported mobile plans from INR 149 quarterly, with an ad-free premium yearly plan at INR1499. Netflix's ad-free tiers range from a INR 149 monthly mobile plan to a INR 649 premium monthly plan for four screens. ZEE5 has three-month premium plans at INR 599 for three devices, alongside regional monthly options from INR 99. SonyLIV provides a mobile-only annual plan at INR 699 and a premium yearly plan for two devices at INR 1499. YouTube premium starts with INR 149 monthly.