Skip to main content

Market Overview

Pay More, See Less? Prime Video Subscribers Sue Amazon For Flooding 'Ad-Free' Content With Commercials

Share:
Pay More, See Less? Prime Video Subscribers Sue Amazon For Flooding 'Ad-Free' Content With Commercials

Amazon Inc. (NASDAQ:AMZN) is facing a potential class action lawsuit due to the recent introduction of commercials to its Prime Video service. Some users have deemed this move as deceptive.

What Happened: The lawsuit has been filed in a federal court in California, claiming that Amazon’s decision to add commercials to Prime Video and charge an extra $2.99 per month to skip them breaches the contract and violates state consumer protection laws.

Existing subscribers argue that they signed up for an ad-free service, and Amazon’s decision to introduce ads changes the terms of their agreement. The suit states, "Subscribers must now pay extra to get something they already paid for."

Unlike other streaming services like Netflix Inc. (NASDAQ:NFLX) that offer ad-based subscription levels, Amazon did not introduce its ad-supported version as a lower-priced option. Instead, it included ads in the base subscription model and charged a premium to customers who wanted to skip them.

See Also: ChatGPT Shocks Internet Users: You Ask, And It Will Reveal Its Secret Sauce

The lawsuit seeks class-action status, an injunction prohibiting Amazon from charging existing Prime subscribers extra to avoid ads, and restitution for those who have already paid.

Meanwhile, Morgan Stanley predicts Prime Video ads will generate nearly $5.2 billion annually.

Why It Matters: Amazon’s decision to introduce ads to its Prime Video service was first announced in late December. The company confirmed that the change would take effect on Jan. 29, 2024.

Amazon’s entry into the streaming ad wars presents a lucrative opportunity for advertisers struggling to connect with audiences scattered across various streaming services.

However, the decision has not been well-received by all, leading to the current potential class action lawsuit. This comes at a time when other streaming services like Netflix are also looking to further monetize their platforms.

Check out more of Benzinga's Consumer Tech coverage by following this link.

Read Next: Apple’s iMessage Escapes Antitrust Threat, EU Says It Does Not Qualify As A ‘Gatekeeper Service’

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Photo courtesy: Thibault Penin on Unsplash

 

Related Articles (AMZN + NFLX)

View Comments and Join the Discussion!

Posted-In: Amazon Prime Video benzinga neuro Consumer TechEntertainment News Legal Top Stories Tech

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com