Amazon is making an even bigger play for the television advertising market with a planned launch of an ad-supported video service specifically for Fire TV device owners, according to a report today from The Information. The service, which could be called Free Dive, is said to be very close in concept to the Roku Channel, an ad-supported free video service for Roku streaming devices and smart TVs that’s helped the device maker grow its platform business. These services tend to offer a random mix of older catalog content, but they’re free to stream.
The Information estimates Amazon has around 48 million customers who own a Fire TV device, either in the form of a HDMI stick, a more powerful and 4K-equipped HDMI dongle, and the new, Alexa-enabled Fire Cube. We have no data on how many of those users are Amazon Prime members, but it’s safe to say a sizable amount pay for that annual subscription and have access to Prime Video content as a result.
So the ad-supported video service is not likely to be an alternative to Prime Video so much as an add-on that can help it eat up more of the TV ad market. According to the report, Amazon is focusing on licensing older TV shows from major studios to fill out the service’s introductory library.
The Information also reports that the service is being developed by Amazon’s IMDB subsidiary, and that it follows similar actions the company has taken in the past. Most notably, Amazon has introduced ad-supported programming to IMBD and increased the presence of video advertising on Twitch, which also just earlier this month removed the ability for Twitch Prime members to get ad-free viewing as part of that complimentary subscription service.
The Information says Amazon is beefing up advertising during sports broadcasts too, like European soccer league matches and NFL games in the US it licenses out for Prime. All of this suggests Amazon sees TV advertising as a growing source of untapped revenue for its business as it continues to expand further into traditional media distribution.