What’s another way for Amazon to make money on Alexa+ besides paid subscription plans? You guessed it: advertising. And Amazon’s CEO is already floating the idea of sprinkling ads into the still-gestating Alexa+ experience.
Speaking Thursday during a conference call with investors following Amazon’s second-quarter earnings report, CEO Andy Jassy boasted that the roughly one million users in the Alexa+ early preview program “really like the experience” and “recognize how much better it is than what it was before.” (My own Alexa+ experience was a bit more nuanced.)
Asked about the possibility of Amazon “tapping into…advertising” with Alexa+, Jassy noted that Alexa+ offers a “delightful shopping experience” and that “there will be opportunities as people are engaging [in] more multiturn conversations to have advertising play a role to help people find discovery and also as a lever to drive revenue.”
Then Jassy went a little further, adding that “over time…as we keep adding functionality that there could be some sort of subscription element beyond what there is today.”
So, what’s Jassy saying here? Is there a possibility that in the future, Alexa+ might give a “sponsored” answer to a question, similar to the sponsored results you see at the top of search results?
And that leads to another possibility in terms of a “subscription element beyond what there is today.” Might there eventually be an ad-free tier for Alexa+, and if so, would that put Prime subscribers in the position of having to pay more for an Alexa+ free from ads, similar to what’s going on now with Prime Video? (It was TechCrunch that raised the specter of an ad-free Alexa+ tier.)
Now, Jassy did note that a new “subscription element” for Alexa+ could come “as we keep adding functionality.” So, perhaps he means a pricier Alexa+ tier would simply offer more advanced features, similar to ChatGPT Pro? Or would a new “pro” tier have better features and be ad-free?
I’ve posed those questions to Amazon, and I’ll update this story when I hear back.
For now, nobody’s paying anything for Alexa+, which is still in a limited early access period. Eventually, Alexa+ will be free for Prime subscribers and $20 a month for everyone else.
As far as the possibility of ads on Alexa+, the idea isn’t all that surprising. After all, Amazon’s Echo displays are riddled with advertisements; just this morning, my Echo Show 8 was displaying a USB hub for sale on Amazon, which is almost certainly a sponsored placement. And don’t forget the Amazon Kindle readers with ads on the lockscreens.
And when it comes to paying extra for an ad-free Alexa+, who can forget Amazon putting ads into Prime Video and then asking Prime members to pay extra for an ad-free version of the streaming service? Plenty of Prime users are still steamed about that one.
Now, will ads on Alexa+ and/or an ad-free Alexa+ tier actually happen? After all, I just plucked a couple of isolated Andy Jassy quotes out of a lengthy conference call, and Jassey’s comments were pretty vague. But it’s fair to say he’s at least mulling the idea, and squeezing ad revenue out of Alexa+ is something Amazon’s investors most certainly want.
The big question is how ads on Alexa+ would work, and how annoying they might be. Looking back, I had a Kindle with lockscreen ads, that that ad experience didn’t bother me one bit. The Amazon advertisements on my Echo Show 8? Not a giant deal, but yeah, they bug me. Alexa+ stopping mid-sentence to pitch me a sponsored product, or giving me sponsored results in response to my queries? I hope not.