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Amazon Prime Video will start showing ads on Monday

Amazon (AMZN) Prime Video users will be facing higher prices if they want ad-free viewing. Starting January 29, customers will have to pay an additional $2.99 per month if they want to watch Prime Video content without ads.

Yahoo Finance Senior Reporter Alexandra Canal reports the details in the video above.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich

Video Transcript

AKIKO FUJITA: Amazon Prime and Prime Video users certainly want to listen up. You're going to have to cough up a bit more cash for the service if you don't want ads. For more on this, let's bring in Yahoo Finance's Allie Canal for a breakdown. More ads with streaming, Allie.

ALEXANDRA CANAL: More ads with streaming, and this time, it's hitting Prime Video. Like you said, Akiko, if you don't want ads, you're going to have to pay an extra 3 bucks to get that premium version. So if you're a Prime subscriber, you automatically get Prime Video in there. And it's automatically going to default you to that ad-supported version. Now, that's not going to cost you any other-- anything else that's going to be the standard there. But again, if you want that premium, going to be 3 bucks more.

And it's interesting to see Amazon entering the over-the-top ad-supported space, especially if you think about the competitors out there. It's a really different strategy than what we've seen from a Netflix or a Disney, which gave consumers the choice of ads or no ads. But Amazon is a much different company, especially because of that Prime membership. So analysts that I've spoken with have said most subscribers will probably stay on the ad-supported version. They're not going to pay up for that premium tier.

Amazon also has a relatively lower cost to have ads on the platform for ad buyers, as opposed to Netflix or Disney. And that could potentially bring down the cost of TV ads across the board. It's also going to encourage a lot more competition. Netflix was specifically asked this on the earnings call if they're worried about Amazon entering the market. They said they're not. They said, there's a lot of ad inventory to go around. And it's only going to force them to make sure that their technology is at the top of its game in order to lure those ad buyers to their platform.

But Amazon, as a whole, has a really broad reach, right? The audience is huge. They have a lot of tech behind them. They have a lot of data. And I think that's going to create just this interesting dynamic between all of this streaming services, as ads become more and more prominent in the streaming landscape. And Akiko, I know you're not an ad-supported girly, but I pay for the ad-supported version for Netflix. I don't mind it. And I think, just given the landscape, how many streamers we have on the market, that is a viable option for a lot of consumers out there.

AKIKO FUJITA: Yeah, I was looking at the bills, right? That adds up. You figure, you've got how many streaming services. One of them's got to give if you want to keep it. Maybe you consider the ad-supported tier. So maybe I'll take a look at a few of them, a few of them. Allie Canal staying on top of that for us. Thanks so much.