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Amazon is planning to sunset its free, ad-supported television application Freevee in the coming weeks, according to three people familiar with the strategy—part of a broader effort to focus its advertising and product efforts on Prime Video, which launched an ad-supported tier in January.
The exact date for the closure depends on a handful of ongoing factors, but it will likely shutter during the second quarter, potentially before the NewFronts begin in late April, according to two people familiar with the matter.
“If the question is whether or not Amazon will persist with two stand-alone streaming services,” said one person familiar with the situation, “I’m certain the answer is no.”
Freevee, which Amazon rebranded from IMDb TV in April 2022, has historically functioned as a free, ad-supported alternative to Prime Video, where content largely requires an Amazon Prime subscription for access.
But when Amazon introduced advertising to Prime Video in January, the decision threw the fate of Freevee into question. With both services already sharing certain titles, Amazon is essentially hosting a similar slate of ad-supported programming on two separate apps.
This redundancy, combined with several other factors, compelled Amazon to wind down Freevee, according to three people familiar with the matter.
The decision could let Prime Video market itself more clearly as a three-tiered service, with Freevee rebranded as its free, ad-supported version, an ad-supported subscription product and an ad-free premium tier with new perks still to come, according to two people familiar with the strategy.
“There are no changes to Freevee,” said an Amazon representative. “Amazon Freevee remains an important streaming offering providing both Prime and non-Prime customers thousands of hit movies, shows, and Originals, all for free.”
Confusion among viewers and buyers
Much of the appeal of Freevee was that it let Amazon break into the ad-supported streaming business, according to three people familiar with the strategy.
The duplicate nature of Freevee and Prime Video has led to confusion among both viewers and ad buyers, according to two people familiar with the matter. Heading into NewFronts, Amazon would like to focus its efforts on selling one ad-supported service rather than two.
Likewise, the marketing budget dedicated to promoting Freevee has come under scrutiny amid a larger effort from Amazon to reduce expenses. The company conducted layoffs in January across Prime Video and streaming service Twitch.
The Freevee app also lacks a streamlined means to convert its viewers into subscribers, according to two people familiar with the matter.
Viewers consuming free, ad-supported content on Prime Video encounter its paywalled options and can be upsold into Prime subscribers, which are more valuable than Freevee viewers because the former contribute two sources of revenue.
“Prime Video wants the customers who are only interested in free because they think they might be able to convert them,” said a person familiar with the matter. “They were not going to be able to convert them from Freevee.”
Laying the groundwork for months
Amazon introduced ads to Prime Video less than 30 days ago, and the company is actively monitoring consumer feedback and rates of churn to determine the success of the initiative, according to three people familiar with the matter.
Based on this data, Amazon might delay closing Freevee if customers revolt, or if too many of them opt to upgrade to the ad-free tier, according to two people familiar with the strategy. If the latter happens, Prime Video could find itself unable to meet the inventory quotas it has promised advertisers, forcing it to delay the closure.
So far, neither concern has materialized.
Freevee is not long for this world.
Anonymous source
Internally, Amazon has been laying the groundwork for this decision for months, according to two people familiar with the matter.
Last summer, Prime Video staff began exploring ways to better migrate Freevee viewers to Prime Video, and in August, the company began pulling technical staff from Freevee to build out its ads infrastructure. When Amazon conducted layoffs in January, the Freevee marketing and strategy staff were particularly hard-hit, and the service has seen two of its three directors migrate to Prime Video, according to sources.
Once Prime Video subsumes Freevee, it will use Freevee content as its “front porch” to lure in potential customers, according to two people familiar with the strategy.
The ad-supported subscription service will continue as it is today, but the premium, ad-free tier might soon feature more perks, such as Dolby Atmos audio, to entice subscribers to upgrade.
“Freevee is not long for this world,” said a person familiar with the matter.
This story has been updated to include comment from Amazon.
