Starting today, Amazon will begin airing ads on Prime Video in the US, making it the latest streamer to debut an ad-supported tier.

The company aims to have “meaningfully fewer ads” on the streamer than its peers, according to a press release, although it did not define what that means. Prime members in major markets will automatically become part of the ad tier, which Amazon previously told advertisers would, in the US, translate to about 115 million monthly active viewers. If US-based viewers want to watch without ads, they’ll need to pay an additional $2.99 a month.

Following the pack: Prime Video is the latest in a line of streaming services that have pursued ad-supported offerings after first debuting ad-free. Netflix began offering an ad-supported tier in late 2022, and Disney+ followed suit a month later.

Delia Marshall, president of the WPP agency Eicoff, said the new ad tier offers advertisers more ad inventory, an opportunity to target, and measurability—in other words, “music to the ears” of agencies and advertisers. By automatically moving existing Prime Video users to the ad-supported plan, Amazon won’t find itself slowly growing its ad-supported user base “like all of the other [streamers] are doing,” she said.

Dan Rayburn, conference chairman of the Streaming Summit, said he expects Prime Video to be able to, over time, apply the user data Amazon already has to ad targeting. Ultimately, he said, the move to add ads was somewhat inevitable: “They’re spending a lot of money! [Content] is not cheap,” he said.

Continue reading here.—JS

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The Federal Trade Commission is scrutinizing partnerships made between AI and cloud computing companies that could constitute potentially anticompetitive behavior, Chair Lina Khan said last week at an FTC event focused on AI.

Specifically, the commission is probing Microsoft’s partnership with OpenAI, as well as separate deals Amazon and Google have made with Anthropic, the commission said. The five companies will be required to share information about their agreements, oversight, and competitive impact, among other topics, within the next 45 days.

• Microsoft, which first invested in OpenAI in 2019, has spent roughly $13 billion on the ChatGPT maker.
• Google and Amazon have reportedly invested $2 billion and $4 billion, respectively, in OpenAI rival Anthropic.

“There’s no AI exemption from the laws on the books, and we’re looking closely at the ways that companies may be using their power to thwart fair competition or trick the public,” Khan said.

Advertisers—and investors—are gaga for AI, and most advertising platforms have figured out ways to cram generative AI tools into their tech, like Google’s new generative search engine. But there’s increasing scrutiny over the ethical and legal implications of AI technology.

The news of the probe follows a report from Politico that the commission had begun working with the Department of Justice to investigate OpenAI’s relationship with Microsoft. The commission is already investigating the AI company over whether its technology was built using “unfair or deceptive privacy or data security practices.”

The FTC framed the inquiry beginning this week as essential to protecting competition and minimizing harms from the fast-growing technology.

“Will this be a moment of opening up markets to fair and free competition?” Khan said Thursday. “Or will a handful of dominant firms concentrate control over these key tools, locking us into a future of their choosing?”—RB

Netflix’s ad-supported tier continues to gather steam, but another competitor is on the way.

The streamer added more than 13 million subscribers globally in its most recent quarter, it said last week, surpassing analyst estimates and bringing its total subscriber count to 260.3 million households globally.

The US and Canada, where Netflix makes the most monthly revenue per user of any other region ($16.64 per member as of Q4, up slightly year over year), counted more than 80 million total subscribers, up 2.8 million compared to Q3. The biggest subscription surge, though, came from the streamer’s European business, where members grew by 5 million in the quarter, bringing the total subscriber base there to nearly 89 million.

Ad growth: In addition to its overall subscriber growth, Netflix’s ads business continues to increase: The streamer’s ad-supported tier, which first rolled out in November 2022 and costs $7 a month, now has 23 million monthly active users, co-CEO Greg Peters said in a call with investors, up considerably from the 15 million monthly active users the company last reported in November. Ad-supported membership grew almost 70% quarter over quarter, and the streamer’s ads plan makes up 40% of sign-ups in its ads markets, the company disclosed in its shareholder letter.

Pay up: Netflix said its password-sharing crackdown, which includes charging certain members more for watchers outside their households, has helped encourage additional growth after some slowdown in 2022 and 2023. In the letter, the company said that “many millions” of Netflix users are now using the paid sharing features.

“We believe we’ve successfully addressed account sharing, ensuring that when people enjoy Netflix they pay for the service too,” the letter read.

Continue reading here.—JS

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Executive moves across the industry.

• Jeff Collins, executive VP of ad sales at Fox News Media, is taking over as president of advertising at Fox Corp., replacing retiring ad sales chief Marianne Gambelli.
• Gina Hardy, formerly chief customer officer of Uber’s soon-to-shutter alcohol-delivery app Drizly, is now EVP and chief marketing and experience officer at Chamberlain Group.
• Mike Rosich, GM of dna Communications, has been named dna’s global president.