Amazon is reportedly in the process of creating a free, ad-supported version of its Prime video streaming service, and is already in talks with TV networks, movie studios and other media companies about programming for the service.
According to Ad Age, citing people familiar with the plans, Amazon may share audience information and ad revenue, as well as link payments for content to the number of hours people watch it, with content creators in order to get the free service running.
The eCommerce giant is hoping to delve into the back catalogues of TV and movie studios to bring in more children’s programming, as well as lifestyle, travel, cooking, and other shows that would fit its platform.
Earlier this year, it was reported that Amazon was on course to spend $4.5bn on video content this year, as it seeks to mount an even bigger challenge to Netflix. Of course, the video streaming market is getting more crowded with Facebook and Apple also investing heavily on content.
In introducing a free version, Amazon could bring in far more users than its rivals and, in-turn, convert these people into paying Prime subscribers.
“Amazon is doubling down on its own media and content, and thinking about how to make that available,” an advertising executive told Ad Age. “The way to do that is a freemium model.”