Competiton is growing for linear TV advertising dollars. Local direct businesses who have been loyal traditional television clients are seeing streaming companies causing a shift in CPM values. Philip Jay LeNoble, Ph.D.

COMMENTARY

Amazon Streaming Ad-Dollar Drive, 'TNF' Moving Yardsticks?

• by Wayne Friedman , Staff Writer, January 11, 2024

Wake up. Amazon wants your money -- so much so they are offering new Prime Video ad inventory at a modest $30 cost per thousand viewers (CPM), according to reports.

Maybe this is a holiday sale. We can't be sure.

But for sure, it s not the $65 introductory CPM price tag that Netflix reportedly was looking for about over year ago when it started up its advertising option. It's not even at the Netflix reported $39 to $45 CPM range it is currently doing business at. 

Why the seemingly inexpensive price tag? 

One industry executive believes it's all about scaling up quickly the Prime Video platform for advertisers.  When asked by TV Watch, an Amazon representative had no comment about reported initial CPM price tag.

Part of that scaling calculation is around the 100 million or Amazon Prime subscribers who are active Prime Video users. How many, for example, are watching 20 to 30 hours a month of Prime Video content -- say, an hour a day? That would be important.

Another media executive believes that at nominal Prime/Prime Video subscriber levels, Amazon could ramp up to pull in around $3 billion a year on advertising revenue. 

Yes -- this is just the drop in the bucket compared to the revenue Amazon pulls in overall on a yearly basis.

Perhaps that is just the point. Fly under the radar.

It goes without saying that Prime Video's now rapidly growing “Thursday Night Football” -- which boosted the NFL profile on streaming, as well young viewers/younger median age viewers -- will play a factor in next fall's major advertising sales push for Prime Video.

Perhaps even earlier. It could be a big overall linchpin in upfront package deal-making as Amazon's Prime Video enters the ad-supported arena Jan. 29.

Now for some Monday morning quarterbacking.

One needs to wonder what would-be competitors think now of Amazon's big push -- especially when it comes to directionally for sports. Should they have moved more aggressively into making bids for more top-flight sports property like NFL's “Thursday Night Football”. 

Perhaps the current NBA negotiations will see a major streaming deal.

So are Netflix, Apple TV+, Paramount+ ready to step up the action?

The game is on.