Report: Amazon planning an ad-supported video streaming service

According to a report in the New York Post, Amazon is preparing a free video streaming service that will be support by advertisements. The ad-supported option will apparently run alongside its current $99 Prime membership subscription, acting as an alternative for customers who would rather do without the fees.

Amazon currently sits a long way behind market leader Netflix for the most popular online streaming service, so a free-to-watch option could be the key to making up the ground. The e-commerce company already offers ad-supported streaming for the first episodes of select TV shows, which it uses to try and entice viewers into the full subscription service. A broader roll-out of ad-supported content could have a similar effect.

Amazon’s broadband traffic on fixed networks grew from 1.61 percent to 2.58 percent. Netflix accounts for 32.39 percent of aggregate traffic.

However, advertising is the big potential revenue earner here, as the company already has numerous advertising properties related to video content. If the company made the service available across a broad range of platforms, there are millions of potential mobile and TV customers out there.

Amazon also has its hardware line-up to consider. Better access to video content out of the box, especially if it’s free, could help the company compete with Google’s pre-installed Movie & TV purchasing options. Advertisements from its Kindle devices are already estimated to bring in $1 billion in revenue already.

Would you make use of advertisement supported video streaming or do you prefer ad-free subscription based services?