Amazon Reportedly Preparing to Shut Down Freevee as Prime Video Ad-Tier Makes Service Redundant
According to new information, Amazon no longer sees a need for having two ad-supported streaming services now that Prime Video carries ads.
If you’re a frequent viewer of Amazon’s free ad-supported streaming service Freevee, you’d better spend as much time with the platform as you can now. An exclusive report from Ad Week indicates that Amazon intends to shut down the free ad-supported streaming TV (FAST) service as the company does not see the need for two ad-supported streaming services after incorporating ads into its existing Prime Video plan in late January.
- Amazon intends to sunset Freevee sometime in the second quarter, potentially in late April.
- Confusion among customers, as well as a desire to reduce its costs for advertising the two streamers led to Amazon’s decision to end Freevee.
- Amazon believes it can more effectively upsell customers watching free content from the Prime Video platform as opposed to Freevee.
When is Freevee Shutting Down?
Ad Week’s report did not include a specific date for the shutdown, but it did indicate that the service was likely to see its end sometime during the second quarter. Ad Week’s sources say that there are several factors for Amazon to consider before it can execute the maneuver, but that it could put the kibosh on Freevee before NewFronts presentations — where streamers show off their new digital content for advertisers — in late April.
“If the question is whether or not Amazon will persist with two stand-alone streaming services,” one person familiar with the situation told Ad Week, “I’m certain the answer is no.”
One potential X-factor that could delay the move to sunset Freevee is the success of Prime Video’s ad-supported plan. If a large number of customers cancel Prime Video or upgrade to its ad-free tier, the streamer might not be able to meet the ad inventory quotas it promised advertisers that it could reach. That would mean that Freevee would have to continue, in order to meet the contractual obligations with advertisers while the ad-supported plan of Prime Video builds scale. A survey from late January found that over 20% of Prime Video customers indicated a willingness to cancel because of the introduction of ads, but only 9% planned to upgrade to the ad-free option.
Why is Amazon Sunsetting Freevee?
Amazon’s motivations for discontinuing Freevee are, as expected, purely financial. For one thing, the company wants to streamline its streaming operations and reduce the costs of advertising two separate services, especially since the two streamers share a wide range of content.
Customer confusion also played a role in the decision to shut down Freevee. As Prime Video now carries ads on its base tier, it is easy to understand how viewers could become confused as to which service was which. Instead of offering a separate app for streaming free, ad-supported content, Freevee could be rebranded as another tier of Prime Video, offering much of the same live and on-demand content for free without confusing customers with a different streaming brand.
Amazon also sees a greater opportunity to upsell customers to paid streaming plans. This will be easier to do if Freevee becomes a free tier of Prime Video than it is currently; more closely integrating premium Prime Video titles like “Lord of the Rings: The Rings of Power” and “Reacher” with Amazon’s free streaming content while keeping them behind a paywall could be an effective strategy for gaining more paid subscribers.
“Prime Video wants the customers who are only interested in free because they think they might be able to convert them,” another person with information on the matter told Ad Week. “They were not going to be able to convert them from Freevee.”
Amazon Prime Video
Amazon Prime Video is a subscription video streaming service that includes on-demand access to 10,000+ movies, TV shows, and Prime Originals like “The Lord of the Rings: The Rings of Power,” “Jack Ryan,” “The Marvelous Mrs. Maisel,” “The Boys,” and more. Subscribers can also add third-party services like Max, Showtime, STARZ, and dozens more with Amazon Prime Video Channels. Prime Video also offers exclusive live access to NFL Thursday Night Football.