Amazon Prime Video is undercutting rival streaming platform Netflix on advertising prices as it battles for a competitive market share in an increasingly crowded market.

With the introduction of ads to its streaming service five months ago, the Seattle-based ecommerce giant joined a crowded and complex field of ad-supported streaming tiers.

Since Netflix first introduced the idea in November 2022, advertising space on streaming platforms has unsurprisingly become highly sought after by brands, with Paramount+ and Disney+ both also getting in on the action.

In a clear indication of the direction the market is taking, Apple TV is also expected to introduce its own ad-supported tier in the not-too-distant future.

Subscribe to Marketing Beat for free

Sign up here to get the latest marketing news sent straight to your inbox each morning

According to a recent report in the Financial Times, Amazon is now charging advertisers less for its slots than Netflix in a bid to outdo its main competitor, although it is still charging more than Disney+.

One executive told the FT that Amazon’s arrival onto the ad-supported scene has forced its rivals to lower their own prices, saying: “There is downward pressure. They knew what they were doing in terms of flipping everybody over into the tier.”

Rivals are also concerned about Amazon’s vast retail strength, which drives greater interest in slot for advertisers. The tech giant has also automatically converted its more than 200 million global subscribers to its ad-supported tier.

It would appear that the service will for now only be going from strength to strength, with Citi analyists estimating that Prime Video adverts could generate more than £3.8 billion in “high-margin advertising revenue” upon their introduction.