Roku, in particular, has been a persistent rival, going after Amazon’s Fire TV, as they both offer streaming devices that link households to connected TVs. Amazon’s Freevee and Roku both produce original programming, available through their connected TVs and set-top devices, opening ad inventory directly to brands that prefer buying into programmatic environments—which is automated online advertising. Programmatic video ad spending is soaring in the U.S., and is expected to grow 20.7% year over year in 2022 to $63 billion. That would make programmatic video advertising more than 50% of the total programmatic market, according to eMarketer.
Meanwhile, Amazon also has Prime Video, which is a vehicle for generating paying subscribers loyal to the Amazon ecosystem, and Amazon has struck major deals with entities like the NFL. Prime Video will exclusively stream Thursday Night Football starting this year, which will spin off new sports programming and advertising deals.
Amazon has been recruiting an ad operations team in recent months to run sales pitches to major brands in sports. The company has been looking for operators to secure innovative ad packages and content tie-ups with brands around new programming. The sports-ops team is developing ad products that could come with at least $30 million prices for brands, according to buyers who have seen the numbers. Twitch, the streaming video site that is similar to YouTube, could also open complementary ad-supported programs within the orbit of NFL on Prime. Twitch could bring a more community-driven lineup of online commentators who could follow games, talk with popular gamers, and create new styles of unpolished broadcasting meant for digital video on computers and mobile devices.
Freevee has a roster of shows and free ad-supported channels, which often deliver shows that are familiar to traditional cable audiences—reality shows, true crime, cooking and made for TV movies. Freevee also has Judge Judy Sheindlin shows. Amazon also announced a deal to continue to license newer NBCUniversal movies like “The Invisible Man,” “Fast and Furious 9” and “Sing 2.”
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In many ways, the branding on Freevee can be slightly irrelevant depending on where a viewer accesses shows associated with the apps and channels under the service. Prime Video members will see Freevee apps, similar to how they encounter IMDb TV apps in a Fire TV setting or within Prime Video. Freevee appears among lineups of other ad-supported video apps from media companies that also appear on Fire TV. There is a growing menu of free ad-supported apps with similar programming like Tubi, Pluto TV, Xumo, Vizio's Watch Free+ and Samsung TV Plus.
Freevee channels also play on a schedule, like traditional TV, funneling programming to viewers who sometimes just want to turn on their TVs and have programming decided for them, instead of getting lost in libraries of endless titles.
Amazon will present new shows at a NewFront pitch on May 2 in New York City. Roku presents on May 3.
Roku and Amazon are competing for more than just compelling TV shows and large subscriber bases. They both also are working on ad tech to make serving internet video ads easier across their platforms, and they are combining data to target ads to households. Roku has a partnership with Kroger, the largest supermarket chain in the U.S., which helps the streaming platform tie commercials to shopper data. And Amazon owns the largest e-commerce platform in the U.S. with about 150 million Prime subscribers.
This season's NewFronts are going to be a scramble among the major digital platforms to open premium, ad-supported, streaming content to programmatic ads; with brands looking to reach large audiences through TV while also taking advantage of new types of shopper data to power those campaigns with more efficiency. Amazon has already had success building its ad business with this model. Amazon’s ad sales revenue hit $31 billion in 2021, growing 32% year over year, according to its yearly financial report.