Streaming services like Amazon Prime Video promote annual subscriptions as a way to save money. But long-term commitments to streaming companies that are in the throes of trying to determine how to maintain or achieve growth typically end up biting subscribers in the butt—and they’re getting fed up.
As first reported by The Hollywood Reporter, a lawsuit seeking class-action certification [PDF] hit Amazon on February 9. The complaint centers on Amazon showing ads with Prime Video streams, which it started doing for US subscribers in January unless customers paid an extra $2.99/month. This approach differed from how other streaming services previously introduced ads: by launching a new subscription plan with ads and lower prices and encouraging subscribers to switch.
A problem with this approach, though, as per the lawsuit, is that it meant that people who signed up for an annual subscription to Prime Video before Amazon’s September 2023 announcement about ads already paid for a service that’s different from what they expected.
And that’s not the only risk people face when opting-in to a yearlong relationship with streaming services these days.
Paying extra “for something they already paid for”
The lawsuit recently filed against Prime Video names California resident Wilbert Napoleon as a plaintiff and argues that Amazon’s advertisements for Prime Video made “reasonable consumers” think that they would get ad-free movie and TV-show streaming for the duration of their subscription.
The lawsuit reads:
Reasonable consumers expect that, if you purchase a subscription with ad-free streaming of movies and tv shows, that the ad-free streaming for movies and tv shows is available for the duration of the purchased subscription.
… however, Plaintiff and class members’ reasonable expectations were not met. Instead of receiving a subscription that included ad-free streaming of [TV] shows and movies, they received something worth less.
Napoleon bought an annual subscription to Prime Video in June 2023, per the court filings. The lawsuit accuses Amazon of falsely advertising Prime Video.
“Subscribers must now pay extra to get something that they already paid for,” the lawsuit says.
The idea of expectations not being met is common for streaming customers. That said, the lawsuit hasn’t gotten far enough yet where we should expect big changes to Prime Video or financial penalties for Amazon. Changing the user experience mid-deal is aggravating for customers, but Prime Video’s terms of use claim that Amazon maintains the right to diminish the value of Prime Video:
Offers and pricing for subscriptions (also referred to at times as memberships), the subscription services, the extent of available Subscription Digital Content, and the specific titles available through subscription services, may change over time and by location without notice (except as may be required by applicable law).
But there’s still a broader point to be made around streaming services trying to lure people into yearlong commitments knowing that the product they offer today might drastically change over the next 12 months.
Amazon, for example, announced that it would bring commercials to Prime Video in September and didn’t confirm when it would introduce ads until December, about a month ahead of the changes. Yet, Amazon reportedly had plans to bring ads to the service as early as June, per a report from The Wall Street Journal that cited anonymous “people familiar with the situation.” Despite these reported plans to alter the user experience significantly, Amazon continued to sell annual subscriptions to Prime Video. For months, people were committing to something that they expected would include commercial-free viewing, which used to be a popular draw of Prime Video compared to rival streaming services.
Prime Video also seemingly didn’t give a heads-up that it was removing Dolby Vision and Dolby Atmos support unless subscribers agreed to pay $2.99 more per month for an ad-free plan.
Amazon declined to comment on this story. Lawyers for the lawsuit filed against Amazon didn’t respond to a request for comment.
From pinching pennies to feeling the squeeze
If you’re the type of person who likes to buy in bulk or goes overboard when there’s a sale, you might be tempted to sign up for a yearlong subscription to a streaming service. After all, when offered, the monthly savings are undeniable:
| Amazon Prime Video | Max | Disney+ | Hulu | Apple TV+ | ESPN+ | Paramount+ | Peacock | Shudder | |
|---|---|---|---|---|---|---|---|---|---|
| Monthly subscription price | With ads: $8.99
No ads: $11.98 With Amazon Prime: $14.99 |
With ads: $9.99
No ads: $15.99 No ads Ultimate: $19.99 |
With ads: $7.99
No ads: $13.99 |
With ads: $7.99
No ads: $17.99 |
$9.99 | $10.99 | Basic: $5.99
With Showtime: $11.99 |
With ads: $5.99
No ads: $11.99 |
$6.99 |
| Price per month with annual subscription | With ads: N/A
No ads: N/A With Amazon Prime: $11.58 |
With ads: $8.33
No ads: $12.50 No ads Ultimate: $16.67 |
With ads: N/A
No ads: $11.67 |
With ads: $6.67
No ads: N/A |
$8.25 | $9.17 | Basic: $5
With Showtime: $10 |
With ads: $5
No ads: $10 |
$5.99 |
A yearlong commitment is unappealing for many people, but when faced with the cost of numerous subscription services, the savings can be hard to pass up.
But annual plans have ended up falling short so frequently that many traditional cable companies have moved away from them. Verizon, for example, stopped locking people into annual contracts in 2020 to compete better with streaming services. Optimum brags about not requiring annual contracts, too (Optimum cable does require signing up for Internet, though).
But after pinching pennies by opting for a yearlong subscription, you might eventually feel the squeeze from your streaming service provider.
Beyond the sudden removal of services like HDR and the addition of advertisements, streaming services are known to lose treasured swaths of content, including programs that are not or never were available outside of streaming. And with most streaming services not providing outsiders with detailed information on ratings and what other data they use, it’s hard to predict or understand what movies and shows a streaming service will maintain over the next 52 weeks.
Flexibility is an advantage
Streaming is seemingly the future for watching TV and movies, and now is the pivotal time when viewers are deciding how it compares to traditional media. Companies like Amazon, Disney, and Warner Bros. Discovery are furiously fighting to turn streaming into lucrative long-term businesses, leading to experimentation with things like advertisements, joint apps, mergers, and prices. As streaming figures all that out, it may be prudent for subscribers to weigh the value of these services monthly. Because in a year, who knows what you’ll get.
For streaming services, however, it’s beneficial to lock in users for a year. For one, there’s less chance for subscribers to evaluate whether they still want the service. But an annual contract is also a way for cable providers streaming services to lock people into a service that could change and become less valuable (it’s helpful to understand streaming services’ refund policies, too).
The lawsuit filed against Prime Video might not lead to any dramatic changes. But it’s a good reminder to streaming customers that it’s risky to form long-term commitments with streaming companies that are in a state of flux.