Everything and everyone around us, even remotely related to the internet, is evolving, and global tech giants are no exception. While Indian businesses have long replicated the strategies of international behemoths, the tables are turning. What makes us say so?

Well, after championing an ad-free, premium viewing experience for years, Amazon’s OTT platform Prime Video has now introduced ads to its platform in India — a move that the homegrown TV broadcaster-led OTT platforms have hardly distanced themselves from ever. A prime (no pun here) example is Hotstar (now JioCinema), which has always run advertisements and never relied solely on a pure-play subscription model.

While Amazon Prime Video previously allowed skippable ads, users will now have to watch “minimal ads” that cannot be skipped.

Although this evolution is new in the Indian market, it was not unexpected. In January 2024, Amazon began rolling out ads on Prime Video in the US, with a promise of showing fewer ads than TV and other streaming services. They were also given an option to pay more to skip watching ads completely.

The streaming giant is now . It has informed its users in the country that they will have to cough up an additional fee on top of the standard Prime membership charges for an ad-free experience. Starting June 17th, Amazon plans to charge an additional INR 129 per month or INR 699 per year for an ad-free experience.

However, what stands out as a sore thumb is that the move is the complete opposite of what these international OTT giants stood for — no ads, no reruns, and everything available on-demand.

Now, the question arises: If Amazon eventually had to do it the Indian OTT way, then why the delay?

A former employee of Amazon Prime Video told Inc42 that none of the global streaming giants, including Netflix, has been able to recognise the importance of the ad-supported video on demand (AVoD) model.

“…because strategic decisions were always driven by global headquarters, with minimal autonomy given to Indian leadership. This decision stems from Amazon’s global policy shift.”

A 2024 Ormax Media report revealed that just pay for subscriptions (SVOD), while 72.5% consume only free, ad-supported content (AVOD). In fact, 2024 saw a dip in paid subscriptions, with AVOD viewership growing by 21%. This is despite the fact that OTT subscriptions in India cost as little as $7–$10 per year, the lowest globally.

“Monetising sustainably at such prices is incredibly difficult. Therefore, running ads is the only option to fund content creation while keeping subscription rates affordable,” said Uday Sodhi, the former CEO of SonyLIV, adding that Amazon might be facing the heat.

However, this isn’t Amazon Prime Video’s first brush with ad-supported content.
For several years now, it has been experimenting with ad-supported models. In the US, it began with IMDB TV and FreeDive (now rebranded to Freevee).

In India, it launched MiniTV, an ad-free video service within the Amazon app. Recently, it acquired MX Player, whose content has now been added to Amazon’s ad-supported tier.

So, what’s new here? Compared to its previous experiments, this move represents a strategic shift toward a hybrid model at the master brand level, not through sub-segments.

Even the timing is right for Amazon to go ahead with its AVOD model. For starters, having spent a significant time in India, it commands a significant premium customer base here.

Moreover, this allows the company to provide a high-value, interested audience to advertisers as a more upscale, targeted alternative compared to other AVOD platforms.

Plus, Indian consumers are already sensitised to ad-supported models even for paid content, thanks to products like JioHotstar.

According to experts, even though late to the market, Prime Video has a more compelling value proposition to offer.

“With years of brand building and premiumisation, Prime Video is ready to be the luxury storefront of digital advertising for India. If you’re a premium brand, you need to be there,” Sodhi added.

Not to mention, Amazon’s largest benefit in ad targeting comes from the depth and integration of its data environment. Amazon doesn’t merely know what people watch — it knows what they purchase, how often they shop, the type of spenders they are, and their payment behaviour.

With years of buying history, watch time, content orientation, and clickstream behaviour, all combined on the backend, Amazon can provide hyper-targeted, high-performing ad placements.

“No one else weds data, content and commerce like Amazon. While JioHotstar has JioMart, its commerce platform is in its infancy. With rich insights from streaming and buying behaviour, this is retail gold meets AI-powered ad-tech. It’s not merely advertisements, it’s an AI-fuelled conversion-ready story,” an industry observer said.

Another interesting thing is the way Prime Video has positioned this move. Instead of labelling it as a full transition to ad-supported videos, which could invite content rights renegotiations, it has smartly coined the term “minimal ads”, allowing it to create an additional revenue stream without inviting legal hassle.

Although the picture (pun intended) looks promising, a media planner has warned that Amazon’s waters will be tested alongside the willingness of advertisers to pay.

Mass-market customers may avoid a high-priced space, and premium brands may refrain from committing without immediate ROI.

“If Amazon is able to create specialised ad products for brands that also sell on its platform — and supports it with actual, measurable value that could be a game-changer,” the expert said.

Unfortunately, advertisers aren’t looking too curious. On the user side, however, they will only interact with these ads if the content is worth their time, he added.

Experts also hope that Amazon’s strategy is well-thought-out because if it fails to deliver and engage its audience with exclusive content, shows and movies, it is in for a potential backlash. The near-term collateral damage could then be user churn.

As Amazon rolls out ads on Prime Video in India, it signals more than just a new monetisation strategy — it’s a move to fortify its broader ecosystem, especially when quick commerce players like Blinkit, Zepto and Swiggy Instamart have disrupted the very foundation Amazon was built on, convenience.

“What made Prime sticky was the combination of speed, value and entertainment. But with 10-minute deliveries now redefining fast, Amazon needs to reassert its ecosystem’s worth,” says a Mumbai-based media strategist.

According to a former Amazon executive, it is no more about monetising video for Amazon but rather about deepening engagement across services.

“If you shop more, you stay for the content. If the content is premium, brands follow. If brands follow, ad revenue flows. It’s all connected.”

What differentiates Amazon from rivals is its ability to close the loop between entertainment and ecommerce. With access to purchasing history, browsing behaviour, and payment patterns, Amazon can offer hyper-targeted, conversion-ready ads

“Imagine watching a cooking show on Prime Video and instantly being shown a clickable ad for the same cookware on Amazon with next-day delivery. That’s where this is headed,” the executive added.

This convergence of retail and entertainment positions Prime Video as more than a streaming service and a shoppable media platform. However, for everything to fall in place, Prime will have to offer unmatched content or risk the churn.

[Edited by Shishir Parasher]

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