In early 2024, Amazon will introduce advertising on Prime Video. Is that a booster for the margin?
Amazon is opening up a new source of revenue and, above all, profit with video advertising on Prime from the beginning of 2024. Video advertising could generate revenues of USD 6.2 billion and EPS of USD 0.40 in the US alone. That would be a very high-margin business! In early 2024, Amazon is moving away from providing Prime video content without advertising. Although the Prime subscription costs money, they want to push monetization. In Germany, the U.S., the UK and Canada, Amazon will additionally display video ads starting in 2024....
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- Amazon is opening up a new source of revenue and, above all, profit with video advertising on Prime from the beginning of 2024.
- Video advertising could generate revenues of USD 6.2 billion and EPS of USD 0.40 in the US alone. That would be a very high-margin business!
In early 2024, Amazon is moving away from providing Prime video content without advertising. Although the Prime subscription costs money, they want to push monetization. In Germany, the U.S., the UK and Canada, Amazon will additionally display video ads starting in 2024. If this is discreet and short, users should accept it. For Amazon, this is another option to generate additional revenue and it would be very high margin.
UBS estimates that over time, video advertising could generate about $6.2 billion. EPS is expected to increase by $0.40. If Amazon pulls in that additional EPS annually, it would be a bang for the buck. That\'s because the consensus expects earnings of USD 3.12 in 2024. Video advertising would have the potential to have a significant positive impact on earnings, especially as ad spending shifts from linear to connected TV. Against this backdrop, UBS also gives Amazon shares a potential up to USD 180.
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