According to the Wall Street Journal, Amazon.com (AMZN.O) will create an advertising-supported Prime Video tier.
According to the article, Netflix (NFLX.O) and Walt Disney (DIS.N) have launched similar ad tier schemes.
High inflation and interest rates have caused customers to cut entertainment and another discretionary spending, slowing streaming sector sign-ups.
The WSJ reported that Amazon was talking to Warner Bros Discovery (WBD.O) and Paramount Global (PARA.O) about adding their ad-supported streaming services to Prime Video Channels.
Amazon, Warner Bros Discovery, and Paramount didn’t respond to Reuters’ requests for comment.
Amazon fell over 3% on Wednesday, along with the market.
“In recent years, Prime Video has gotten more aggressive about running promos prior to its shows and including ad-filled sports broadcasts,” said Ross Benes, Insider Intelligence lead analyst.
Prime Video sports coverage includes advertising. “Officially putting ads into Prime Video allows Amazon to centralize its audience and be more consistent with branding,” Benes said.