Amazon and Apple increase streaming revenue with new monetization strategies

By NewscastStudio

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Amazon Prime Video and Apple TV+ are adapting their monetization strategies, leading to increased revenue despite short-term churn.

Parrot Analytics reports that both platforms have implemented separate tactics—Amazon introduced ads with a premium ad-free option, while Apple TV+ raised its subscription price—to increase average revenue per user (ARPU) over the past year. Although these approaches resulted in temporary subscriber losses, both platforms recorded substantial revenue gains.

Amazon Prime Video’s new ad-supported tier, launched in January 2024, allowed subscribers to pay an additional $2.99 monthly to bypass ads.

According to Parrot Analytics estimates, Amazon saw an initial decline in Prime Video usage within the U.S. and Canada (UCAN) region, dropping the user base from 72.1 million in Q4 2023 to 71.6 million in Q1 2024. Churn also increased slightly, from 5.9% to 6.3%. However, subscriber numbers and churn rates had stabilized by the second quarter, suggesting that the ad-supported option’s initial impact on user retention was short-lived. This new tier contributed to a 19.2% revenue increase in Q1 2024 and has reportedly bolstered Prime Video’s growth metrics since.

Apple TV+ opted for a different route, raising its subscription price from $6.99 to $9.99 monthly in October 2023.

This 43% increase led to a notable churn event, with subscriber turnover in UCAN reaching 10.21%. However, Apple TV+ posted a 33% revenue jump in Q4 2023 following the price change. According to Parrot Analytics, Apple TV+ has doubled its share of Apple’s global services revenue since its launch, making it an increasingly significant part of Apple’s revenue strategy. In Q2 2024, Apple’s services division hit $24.2 billion, underscoring the rising financial importance of Apple TV+ within the company’s portfolio.

Both Amazon and Apple appear to be positioning their platforms for long-term profitability.

Prime Video’s ad-supported model leverages Amazon’s broader ecosystem, providing flexibility for users and minimizing churn relative to Apple’s direct price hike. Conversely, Apple TV+ has pursued a straightforward SVOD model, leveraging its high-profile content to gain ARPU.

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This experimentation with different monetization models indicates that streaming platforms increasingly focus on ARPU as a critical growth metric. While both Amazon and Apple faced some subscriber losses, their approaches have highlighted diverse pathways to increased revenue within a competitive streaming landscape.

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