Amazon is pushing back against a report that suggests the tech company will soon close down its free, ad-supported streaming TV platform, Freevee.
On Wednesday, Adweek’s senior media reporter Mark Stenberg said Amazon was in the process of winding down Freevee in order to focus more of its attention on Prime Video, which launched an ad-supported tier last month.
Stenberg’s report, which was based on numerous unnamed sources, claimed Freevee was causing confusion among viewers and ad buyers following the launch of ads in Prime Video. The elimination of Freevee as a standalone streaming platform would allow Amazon to market Prime Video as the sole destination for ad buyers who wanted to purchase commercial inventory against the company’s video content, Adweek suggested, with Freevee possibly living on as a brand name for a free-to-access plan within Prime Video.
After Adweek’s report, an Amazon spokesperson said there were “no changes” coming to Freevee, adding that “Amazon Freevee remains an important streaming offering providing both Prime and non-Prime customers thousands of hit movies, shows and originals, all for free.”
But saying there were “no changes” planned for Freevee in the immediacy is not the same as challenging a report that claims Amazon is considering a shutdown of the platform at some point in the future.
Stenberg’s report offers a number of compelling reasons why Amazon might be considering plans to unwind Freevee, even while they tell reporters and streamers that the app will continue on.
For one, there is no clear path toward converting Freevee streamers into Prime members, which would allow them to watch many of the same titles on Prime Video with ads, Stenberg noted. While Amazon launched Freevee to further develop a connected TV ad business, it has become clear in recent months that its focus is geared more toward getting ads in front of people who are already paying $15 per month or $150 per year for Prime Video. (The company upcharges Prime members to remove ads from Prime content, but content from Freevee and some third party brands, along with live content from the National Football League and other sources, still has ads.)
“Prime Video wants the customers who are only interested in free because they think they might be able to convert them,” one unnamed source reportedly told Stenberg for his story. “They were not going to be able to convert them from Freevee.”
Second, Amazon has been cutting costs across different departments, to include budget reductions and job losses within its video divisions. Prime Video and its live-centric sister platform, Twitch, were among the businesses impacted by those cuts. Freevee’s marketing and technology departments were also hit hard.
One way to reduce costs is to eliminate overlap: If Amazon views Freevee as redundant to Prime Video, it makes sense the free platform would be on the chopping block (or, as Stenberg noted, that Freevee could be further integrated into Prime Video as a free, ad-supported plan).
Amazon is leaving the door open to a lot of different things, Stenberg’s report said. The company is actively monitoring churn rates for Prime Video, and seeing how many customers take them up on an offer to pay a little bit more each month or year for the privilege of streaming most Prime Video titles without ads. If either of those things happen, Amazon might look different at Freevee, given its current and future commitments to certain advertisers. But, so far, neither of those things are taking place, Stenberg said, citing his unnamed sources.
In any case, Amazon is like many of its peer tech companies: Always adapting, always changing. If Freevee is supplanted by the ad-inclusive Prime Video, it probably wouldn’t come as much of a shock — instead, it would show Amazon’s budding ad business, which started first with Freevee, has matured to the point that it carries over to Prime Video, its cornerstone streaming service. On the other hand, if Amazon feels Freevee is too valuable to its ad business — or that it’s a bigger business than what Prime Video can provide now or in the future — nothing will change.
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Editor’s note: An earlier version of this article said Adweek’s story was published on Tuesday. It was published on Wednesday.
