Amazon.com Inc will shut down its free-to-view, ad-supported streaming service Freevee and fold it into its subscription-based Prime Video product, according to people familiar with the matter. Amazon plans to transfer some employees and programming from Freevee to Prime Video, people familiar with the matter said.
The people spoke on condition of anonymity because the changes have not yet been announced. Some shows must remain free due to contractual restrictions, and Amazon is seeking to continue making them available on its main site.
Launched in 2019, the service is a spin-off of Amazon-owned movie data website IMDb. The site has gained some traction with some original programming. Amazon began looking at the cost of programming across its entertainment portfolio earlier this year after it released several pricey series that failed to attract viewers.
PrimeVideo is included with Amazon's delivery service, and the ad-supported version costs $14.99 per month. The company has been expanding its online advertising business. An ad-free version of PrimeVideo is available for an additional fee.
Free streaming services have been popular, with some experiencing strong growth, most notably Fox Corp.'s Tubi, Paramount Universal's PlutoTV and Roku's Roku Channel. While free services often rely on many older movies and TV shows, consumers do seek out fresh programming, which can be expensive and risky for operators.
Amazon has been cutting costs under CEO Andy Jassy, who took over in 2021, and has shuttered dozens of duplicative or unprofitable projects, ranging from futuristic delivery robots to niche cloud computing services. He also took a closer look at some of the company's big-spending sectors, including its devices business and Amazon Studios.