Update (November 14): An Amazon spokesperson provided the following statement to The Verge: "We have no plans to create a free, ad-supported version of Prime Video."
Amazon is reportedly developing a free, ad-supported streaming video service to complement its existing Prime Video offering.
Sources familiar with Amazon's plans tell Ad Age that the e-commerce giant is holding talks with movie studios, TV networks and other media companies with regard to supplying programming for the service.
Unlike Prime Video which is funded by subscribers as part of Amazon's overall Prime package, this offering would be paid for by advertising dollars. As part of its strategy to swoon content creators, Amazon may share audience information with them alongside ad revenue. One source even said ad revenue could be shared in exchange for a set number of hours of content each week.
The service would differ from the Prime Video we know today in that it'll primarily focus on back catalogs from TV and movie studios. One insider said Amazon will specifically look to focus on children's programming as well as travel, lifestyle and cooking shows, all of which would be a good fit for an e-commerce platform. Amazon may also give content creators their own channels.
Amazon was rumored to be working on a similar concept a few years back but decided at the time not to move forward with it.
The idea seems to be two-fold. Not only could Amazon make money on the service itself, it could also use the platform as a way to introduce new customers to its premium (ad-free) Prime Video service and thus, upsell them on a Prime subscription.