Amazon’s Ad Gamble: Why Prime Video is betting on commercial breaks in India
With content costs rising and subscription growth plateauing, Amazon Prime Video introducing ads to Prime Video in India sparks debate over its hybrid monetisation strategy, shifting user expectations, and what’s at stake for brands and consumers alike.
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In a major strategic shift, Amazon is bringing 'limited' advertisements to Prime Video India, marking the first time commercial breaks will appear for paid users unless they upgrade to a new ad-free tier. The move, which mirrors platform's global rollout of a hybrid monetisation model, is aimed at offsetting ballooning content costs and slowing subscription growth in an increasingly saturated streaming market.
According to Media Partners Asia, India's AVOD (Advertising Video-on-Demand) market is expected to significantly outperform SVOD (Subscription Video-on-Demand) in terms of revenue. AVOD is projected to reach $2.6 billion by 2025, while SVOD is estimated at $1.3 billion. This discrepancy highlights the growing popularity of free, ad-supported streaming models in India, which Prime Video is strategically leveraging to expand its reach.
"This is Amazon finally asking: how much longer can we give away gold and call it sand?" says Sushant Sadamate, COO and Co-founder of Buzzlab. “India is the perfect testbed—massive, price-sensitive, and already accustomed to hybrid models. But now, volume isn’t enough. Ad revenue has to do the heavy lifting.”
The move signals a clear recalibration of value in India’s streaming economy. Rather than solely relying on subscription SVOD, Amazon is now adopting an ad-supported video-on-demand AVOD strategy, bringing it closer to the models employed by its competitors.
Its key competitors including JioStar offers ad-supported mobile plans from Rs 149 quarterly, with an ad-free premium yearly plan at Rs 1499, Netflix's ad-free tiers range from a Rs 149 monthly mobile plan to a Rs 649 premium monthly plan for four screens. Meanwhile, the likes of ZEE5 has three-month premium plans at Rs 599 for three devices, and SonyLIV has a mobile-only annual plan at Rs 699 and a premium yearly plan for two devices at Rs 1499.
While Prime will also offer an ad-free option that users can subscribe (starting June 17) for an additional Rs 699 per year or Rs 129 per month, there will be no changes to the Prime membership, including Amazon’s priority delivery service.
This also comes at a time when Amazon Prime Video recently changed its device policy in India, restricting streaming to two TVs and up to five devices in total from January this year.
Rising global content budgets have put pressure on platforms to monetise more efficiently and Amazon Prime Video is no exception. The company has invested heavily in Indian originals and global blockbusters, with titles like The Family Man, Mirzapur, and Farzi drawing large domestic audiences. But content spend has become a double-edged sword, especially as Indian users show signs of subscription fatigue.
“Amazon is no longer relying just on subscriptions—they want to unlock more value from their Prime ecosystem,” says Siddharth Devani, Co-Founder & COO of SoCheers. “With content costs rising and user growth plateauing in India, ads provide a crucial revenue boost.”
Rising content costs aren’t new and India’s OTT space hit user saturation a while ago. This isn’t about reinvention it’s just monetisation math catching up, adds Russhabh R Thakkar, Founder and CEO of Frodoh. What’s telling is the timing of global pressures are clearly influencing local moves but the local market was more than prepared.
Opportunity for Advertisers
Amazon’s hybrid model opens up a rich new advertising environment that few platforms can match, thanks to its e-commerce muscle.
“You’re not just advertising on video—you’re advertising inside a commerce engine,” Sadamate says. “If Amazon can tie video ads to cart additions, product wishlists, or even conversions, this becomes a goldmine for FMCG, tech, fintech, and beauty brands.”
Key sectors expected to jump on board include FMCG players looking to target high-frequency, high-intent consumers via household-targeted content; consumer electronics to leverage Amazon’s retail data to serve shoppable ads tied to new product launches. Brands from fintech and edtech would also look into tapping into regional and young adult audiences who are streaming content at scale; automotive and mobility brands to use OTT as a brand-awareness tool integrated with geo-targeted commerce data; and beauty, wellness and fashion brands who will tap into Amazon’s direct purchase ecosystem which will allow seamless retargeting and remarketing.
“Amazon understands Indian consumers like few others,” adds Dhurvin Shah, Founder & CEO of JOJO. “If it uses its consumer insights to personalise ads effectively, AVOD won’t just be viable—it could dominate.”
Consumer Sentiment: Mixed Signals
The change, however, has not gone unnoticed or unchallenged by Indian subscribers. Many are questioning why ads are appearing in a paid service they’ve long associated with uninterrupted, premium content.
“It’s like charging for a buffet and then asking extra for the main course,” quips one Mumbai-based Prime subscriber.
Read more: From Margins to Mainstream: India’s OTT boom turns regional to capture Bharat’s diverse viewers
“There’s a trust contract with Prime users—ad-free video, faster deliveries, exclusive deals,” Sadamate warns. “If users feel that’s being diluted, there’s a real risk of downgrade or churn.”
Shah believes consumer resistance will fade over time. “Every new monetisation model gets pushback before it becomes the norm,” he says. “If Amazon plays this right, it won’t just be accepted—it will set the precedent.”
Prashant Puri, CEO of AdLift, agrees that the strategy could backfire if not matched with additional value. “Introducing ads while still charging a subscription fee risks upsetting loyal users. If not paired with better content or new perks, it could impact brand perception and increase churn.”
The Commercial Math
India is arguably more ready than most markets for a hybrid model. In 2025, India is projected to have 732 million internet users actively consuming OTT content, representing 83% of the total internet user base. This indicates a strong growth in OTT penetration, with a projected revenue of $4.49 billion and a user penetration rate of 1.7%, and AVOD is already the dominant revenue model. Platforms like JioStar have proven that scale and regional content, when paired with smart ad load management, can yield strong engagement and advertiser demand.
“At JOJO, we saw success starting with AVOD before introducing subscriptions,” says Shah. “The key is regional relevance, content cadence, and affordability.”
Sukhpreet Singh, Chief Revenue Officer of Dish TV, says seamless integration will be key. “As the market matures, platforms need to balance personalisation, pricing, and user control to retain trust and engagement.”
Amazon has already rolled out its ad-supported Prime tier in the US, UK, Germany, and Canada, and is expected to expand globally through 2025. With over 65 million users in India (as per industry estimates), the company is now focused on deepening monetisation rather than chasing new sign-ups.
“It’s a hybrid play that squeezes more out of high-intent users,” Sadamate says. “Amazon isn’t backing off premium— it’s hedging its bets. If it works, others will follow. If it flops, it’ll be a cautionary tale in overplaying platform equity.”
India’s streaming battle is no longer about subscriber numbers alone, say experts, it’s about who can monetise attention best. And with Prime now entering the ad game, the rules are being rewritten.
