Amazon Softens Denials About Ad-Supported Video

But E-Commerce Giant Won't Confirm New York Post Report Either

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Amazon ran pre-roll ads against pilot episodes of some shows earlier this year.
Amazon ran pre-roll ads against pilot episodes of some shows earlier this year.

Amazon may be inching closer to an ad-supported streaming video service.

Earlier this year The Wall Street Journal reported that the e-commerce giant was prepping a free, ad-supported version of its Netflix-rival Prime Instant Video streaming service. At the time Amazon flatly denied the report.

However, on Friday, the New York Post reported that Amazon would launch an ad-supported video service early next year. This time, Amazon isn't outright refuting the claims.

"We're often experimenting with new offers and experiences for customers, but we have not announced any plans to offer an ad-supported video streaming service," an Amazon spokeswoman said in an email to Ad Age on Friday.

It's far from a confirmation, but a substantive change in tone.

Amazon already has something of an ad-supported video service. In February' the company began running pre-roll video ads against pilot episodes of potential Amazon original series. And months it added ads to first episodes of certain other shows on its service for people who aren't paid subscribers.

The Post's story indicates that Amazon is readying something more full-fledged. It's unclear whether that means a free, ad-supported version of its subscription-based Prime Instant Video. If that is the case, Amazon would compete against both ad-free premium services like Netflix and those that offer low-cost and ad-supported versions, like Hulu.

YouTube is also considering adding an ad-free subscription tier, which could dovetail with its plans to fund high quality original shows.

A full-blown ad-supported video service should significantly boost Amazon's advertising revenue, which eMarketer estimates will be more than $1 billion this year, up 40% from 2013.

Ad Age asked ad sales head Lisa Utzschneider about Amazon's video prospects just before she left for Yahoo last month:

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