Amazon exceeds internal target of $1.8 billion for upfront ad revenue in first year of Prime Video push

Amazon is on track to exceed its internal goal of $1.8 billion in upfront video advertising commitments, a person familiar with the financials confirmed to Deadline.

The strong endorsement from advertisers follows a move by Prime Video last January to begin showing advertising for all film and television titles in the U.S. and nine other countries, except to subscribers willing to pay more. to avoid advertising. The streaming service hosted its first Upfront event in New York during the traditional corridor in mid-May, alongside traditional broadcaster parents and tech rivals Netflix and YouTube. In addition to the advertising push and large programming budget, the company was also reportedly willing to price its ad inventory more attractively to stimulate demand as it ramps up its sales efforts.

The information reported the preliminary results earlier Thursday.

An Amazon representative declined to comment on the report when contacted by Deadline.

In recent years, Amazon has made video advertising a pillar of its broader corporate strategy and has pursued major sports rights as a key part of its advertiser-friendly programs. The company is in its third year of NFL exclusive Thursday Night Football Streams and will begin an 11-year contract with the NBA in the 2025-26 season.

In addition to these offerings on Prime Video, Amazon also operates the FAST service Freevee and the gamer-centric live streaming platform Twitch and has highlighted these for advertisers in recent years.

The entire streaming sector has shifted towards advertising in the last two years after a long initial phase in which it was considered a virtually ad-free and subscription-driven medium. Along with new advertising tiers for Netflix and other providers, FAST services have become a large and growing part of the landscape, particularly for traditional providers looking to replace declining linear advertising revenue.

A survey this week by research firm eMarketer found that five streamers would post at least $1 billion in ad revenue in 2024, up from just two in 2020. Amazon came in second, after Hulu and YouTube, with an estimated $3.13 billion. Dollar ranked third on eMarketer’s list.

In his annual letter to shareholders released last April, Amazon CEO Andy Jassy mentioned the advertising push and estimated the company’s total reach at 200 million monthly viewers. “Streaming TV advertising is growing rapidly and is off to a strong start,” he wrote.

Netflix co-CEO Greg Peters was asked about the competitive streaming advertising landscape during an appearance at the FT Business of Entertainment Summit last week. “Amazon has entered the market pretty heavily,” he said. “We came to the conclusion that advertising was an option” that, at $6.99 per month, would appeal to certain consumers. Amazon, on the other hand, “is an advertising company. It is a central part of their DNA. …. Much like Amazon, they kind of came up with the idea and said – what’s their mantra: “Your margin is my opportunity,” I think, right? They came and said, “We’re basically going to go all the way down and start competing from there.”