Amazon is planning to launch an advertising-supported tier of its Prime Video streaming service, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
Discussions around the ad tier have been going on for several weeks, according to the report, and follows the launch of similar plans by rivals .
The streaming industry has been facing a pull back on discretionary spending amid challenging economic conditions.
The WSJ report also said Amazon was holding discussions with Warner Bros Discovery and Paramount Global about adding the ad-based tiers of their streaming services through Prime Video Channels.
Warner Bros Discovery and Paramount did not immediately respond to Reuters requests for comment, while Amazon declined to comment.
Amazon shares were more than 3% lower on Wednesday, in line with a weak broader market.
“In recent years, Prime Video has gotten more aggressive about running promos prior to its shows and including ad-filled sports broadcasts,” said Insider Intelligence principal analyst Ross Benes.
Sports coverage on Prime Video already comes with ads.
“Officially putting ads into Prime Video allows Amazon to centralize its audience and be more consistent with branding,” Benes added.