Is Amazon (NASDAQ: AMZN) testing out free, ad-supported streaming of online content? According to TechCrunch, the retail giant may be trying out the concept. On Monday, it updated iOS versions of its Prime Instant Video app to include free episodes of selected TV series, with advertising breaks before and after the show.
The article cautioned that Amazon has similar ad-supported offerings out already. Roku users, for example, have a "First Free Episode" section in the Prime Instant Video carousel.
Current Prime subscribers who are logged into their accounts won't see the ads, the article noted.
Is the ad-supported addition to iOS a sign of more to come? Analyst Colin Dixon, founder of nScreenMedia, told FierceOnlineVideo that it makes sense for Amazon to pursue the ad-supported model, but that it likely won't happen soon.
"Amazon is in the business of renting and selling videos. If someone was watching a video they could show an ad for a related pay movie or show. That would almost certainly encourage people to rent more and buy more," Dixon said.
"The second thing is they're a retailer. I have a feeling they would welcome the opportunity to leverage video to sell their own products, and sell advertising to some of the people who sell products through their stores."
However, he said that Amazon's current licensing agreements for its Prime Instant Video offerings probably don't include the ability to advertise against that content.
Still, it's not completely out of the question.
In addition to having a market precedent to follow--Hulu, with its combined subscription and ad-supported service--Amazon appears to have set up its Prime Instant Video section with sales and rentals in mind.
"The Amazon client very deliberately mixes pay content with free content," Dixon said. "Ultimately what they want you to do is rent or buy that movie or show. That's an underlying thread. If they were really going after Netflix (NASDAQ: NFLX) they would stop doing this, include robust recommendations, customize the interface for you. They're doing none of this."
Amazon denied reports back in March that it was working on an ad-supported video and music service, and also shot down rumors in January that it was trying to license TV channels to deliver a broadband-based television service. A spokesperson stated to Variety that the online retailer often experimented with new things.
The retailer's launch last week of the Amazon Fire phone led to equal amounts of speculation on how it will handle data costs. CEO Jeff Bezos said the company may make use of AT&T's (NYSE: T) sponsored data program to subsidize its users' data costs.
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