Amazon CEO Andy Jassy saluted the company’s progress in video advertising in his annual letter to shareholders.
Overall ad revenue rose 24% in 2023 compared with 2022, he noted, reaching $47 billion and the growth was “primarily driven by our sponsored ads.” Amazon has added Sponsored TV to the mix, giving advertisers a self-service option that will inject their messages into more than 30 streaming services, including Amazon’s Freevee and Twitch.
Earlier this year, Jassy recalled, Amazon’s Prime Video started including ads on scripted shows and films. He pegged overall reach at 200 million monthly viewers across movies and shows, Amazon MGM originals and live sports including NFL Thursday Night Football. “Streaming TV advertising is growing quickly and off to a strong start,” he wrote.
Unlike Disney and Netflix, which have upped subscription rates for those preferring not to see ads, Prime Video introduced ads as a standard feature across its service. Any Prime member looking to avoid video ads has to pay an extra three dollars a month. As delicate as that message is to sell through with customers, it is a lucrative initiative. One Bank of America analyst’s forecast this year predicted the introduction of ads could soon bring in $5 billion in new annual revenue.
The letter was released as an SEC filing. In a separate filing, Amazon in its proxy statement said Jassy’s pay rose to $1.36 million in 2023 from $1.3 million in 2022. He received a stock award of about $212 million in 2021 as he took the CEO baton from Jeff Bezos.
The shareholder letter tackled a range of other topics, including a pages-long, business-school-ready discussion of “primitive services.” Jassy described “primitives” (for short) as “discrete, foundational building blocks that builders can weave together in whatever combination they desire.” Jassy helped refine the approach to primitives when he was running Amazon Web Services, the company’s profit center for third-party technology, prior to becoming CEO.
Amazon’s annual shareholder meeting will be held on May 22, according to the proxy statement.