Amazon May Have Plans For An Ad-Supported Video Service

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Amazon is reportedly working on a free video service to be supported by ads and built out by IMDB, according to a recent The Information report citing sources close to the matter. The new service is said to be internally referred to as ‘Free Dive,’ although that may ultimately be changed prior to release if the rumors do bear out. Moreover, it will be kept completely separate from Amazon Prime Video and a significant chunk of the company’s subscribers. That’s because Free Dive will supposedly be limited in availability and access only to those subscribers who happen to own one of Amazon’s Fire TV devices, which currently includes a dongle, stick, cube, and some televisions. The current speculation also suggests that, at least for the time being, Free Dive would primarily be comprised of older television shows or episodes that have already been run and is actively pursuing agreements with several studios for that purpose.

Whether or not those rumors turn out to be true, the move wouldn’t necessarily be unusual for Amazon and it might even make some sense. The company has not only made strides toward enabling advertisers to reach some Twitch Prime subscribers who had previously enjoyed ad-free viewing across all channels. The company already has a dedicated base of Fire TV owners which could be enticed into using the service through device-specific advertising targeting a known user base. At the same time, the company has already drawn attention as a possible advertising partner from some very profitable television advertisers for its other services.

Conversely, advertising deals would likely make more sense from a financial perspective if Amazon had a platform that kept the attention of a large audience for a longer period of time. In fact, its advertising profitability has been growing by leaps and bounds over the past several months, based on its most recent quarterly reports. For Q2 2018, it grew by approximately $2.2 billion, at around a 132-percent increase for the quarter. A new service that doesn’t cost end-users any money and is available on the streaming device they already use could go a long way toward giving Amazon an even bigger boost moving forward.