By: Dipin Sehdev
The streaming wars are entering a new phase—one increasingly fueled by advertising. In a move that underscores how far the industry has shifted from its subscription-only roots, Amazon and Netflix have inked a major partnership that will allow advertisers and media buyers to purchase Netflix’s ad inventory through Amazon’s demand-side platform (DSP).
The deal, set to roll out in the fourth quarter of 2025, will give marketers in 12 countries—including the U.S., U.K., France, Germany, Canada, and Japan—programmatic access to Netflix’s growing ad-supported tier. For Amazon, which already operates its own ad-supported video service via Prime Video, the partnership cements its place as one of the most powerful intermediaries in connected TV advertising. For Netflix, the deal represents another milestone in its still-young ad journey.
Why Ad Tiers Are Taking Over Streaming
The Netflix-Amazon pact can’t be fully understood without stepping back to see the larger trend: ad-supported streaming has gone from experiment to necessity. Once positioned as premium, ad-free alternatives to traditional television, nearly all of the major platforms have added lower-cost ad tiers to attract new users and unlock a lucrative revenue stream.
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Netflix launched its ad-supported plan in 2022, and by early 2025, it had grown to 94 million monthly active users.
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Disney+ and Hulu have leaned heavily on ads, offering bundles that mix ad-supported and ad-free plans.
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Warner Bros. Discovery’s Max (formerly HBO Max) introduced an ad-supported tier that helped offset high churn rates.
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Prime Video, Amazon’s flagship service, went even further by making ads a default part of its programming in 2024, pushing users to pay extra for ad-free streaming.
This steady march toward ad tiers isn’t surprising. Subscription fatigue has set in, and consumers are more willing to tolerate ads if it means a lower monthly bill. For streamers, advertising is increasingly seen as the path to profitability, especially as subscriber growth slows in saturated markets like the U.S. and Europe.
Comparison of Streaming Platforms With Ad Tiers
| Platform | Ad Tier Launch | Subscribers (Global) | Ad-Supported Users (Est.) | Strategy & Notes |
|---|---|---|---|---|
| Netflix | Nov 2022 | ~270M (2025) | 94M monthly users (2025) | Focus on premium shows (Wednesday, Stranger Things). Selective sports rights. Leaning on Amazon DSP for programmatic scale. |
| Amazon Prime Video | Jan 2024 (default ads) | ~230M (2025) | Nearly all Prime Video users unless they pay extra for ad-free | Amazon made ads default, positioning itself as a must-buy for advertisers. Leverages retail + streaming data. |
| Disney+ / Hulu / ESPN+ | Disney+ (Dec 2022), Hulu long-standing | Disney+ ~190M, Hulu ~50M, ESPN+ ~25M | Not disclosed, but ad tiers are a major growth driver | Disney bundles ad tiers across services. Major sports and family content make inventory attractive. |
| Max (Warner Bros. Discovery) | Jun 2021 (HBO Max legacy) | ~97M (2025) | ~50% on ad tier (2024 est.) | Uses blockbuster films, DC content, and live sports to bolster ad-supported plans. Integrated with Amazon DSP. |
| Peacock (NBCUniversal) | 2020 launch with ads | ~35M (2025) | Majority on ad-supported | One of the earliest hybrid models. Heavy investment in sports rights (Premier League, NFL). |
| Paramount+ / Pluto TV | Paramount+ (Mar 2021), Pluto always free with ads | Paramount+ ~82M (2025); Pluto TV ~80M MAUs | High % on ad tiers, especially Pluto TV | Combines paid + free AVOD. Strong sports slate (NFL, NCAA). Global expansion key. |
| Roku Channel | Always free with ads | 80M+ active accounts | 100% ad-supported | Fast-growing free streaming platform. Recently added premium FAST channels. Integrated with Amazon DSP. |
| Apple TV+ | No ad tier (yet) | ~45M (2025 est.) | None | Remains one of the only premium holdouts without ads. Speculation persists that an ad tier may arrive by 2026. |
What the Amazon-Netflix Deal Means
Amazon’s DSP is a self-service software platform that allows advertisers to plan, buy, and measure campaigns across Amazon-owned properties as well as third-party apps and websites. By integrating Netflix into this ecosystem, Amazon effectively expands its reach to virtually every major streaming platform.
Amazon already has DSP deals with:
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NBCUniversal (Peacock)
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Warner Bros. Discovery (Max)
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Fox (Tubi, Fox One)
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Paramount (Paramount+, Pluto TV)
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Disney (Disney+, Hulu, ESPN)
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Roku and others
Now, with Netflix in the fold, Amazon’s DSP offers advertisers a one-stop shop to reach audiences across the biggest names in streaming.
For advertisers, the Netflix tie-in simplifies what has traditionally been a fragmented process. Instead of juggling multiple DSPs and ad platforms, brands can consolidate more of their connected TV (CTV) buying through Amazon, leveraging its powerful first-party data and AI-driven tools for targeting and measurement.
Amy Reinhard, president of advertising at Netflix, framed the partnership as part of the company’s broader push to make ad buying easier:
“This partnership with Amazon perfectly aligns with our commitment of bringing advertisers even greater flexibility in their buys to achieve their marketing goals. By integrating Amazon DSP and enabling even more advanced capabilities together over time, we’re making it easier than ever to connect with Netflix’s global engaged audience.”
Paul Kotas, SVP of Amazon Ads, emphasized the strategic synergy:
“Our goal is to remove the guesswork for advertisers by making it simple to manage all of their TV planning and buying with Amazon Ads.”
The Competitive Fallout
While the partnership is a win for Amazon and Netflix, it’s another blow to independent adtech firms, especially The Trade Desk. Long seen as the leading DSP outside of the walled gardens of Amazon and Google, The Trade Desk has also been a partner for Netflix’s ad business. But as Netflix leans further into Amazon’s orbit, questions are mounting about The Trade Desk’s long-term role.
The company’s stock has already taken a hit, dropping over 60% year-to-date, and analysts are increasingly bearish. Morgan Stanley recently downgraded the stock, citing “intensifying competition in CTV” and specifically calling out Amazon DSP’s rapid growth.
Analysts at Lightshed Partners were more blunt:
“It is glaringly obvious The Trade Desk is under attack.”
The rivalry highlights a broader shift in digital advertising, where scale and first-party data are becoming critical differentiators. Amazon’s unmatched retail and streaming data give it a powerful advantage, one that smaller DSPs can’t easily replicate.
Amazon’s Growing Ad Empire
Amazon’s advertising ambitions have been building quietly for years but are now impossible to ignore. In 2024, the company generated $56.2 billion in ad revenue—a 20% increase year-over-year. That puts it firmly in competition with Google and Meta as one of the “big three” in digital advertising.
Several factors have fueled Amazon’s rise:
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Prime Video ads rolled out across all programming in 2024, making its global subscriber base a monetizable asset.
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Sports rights acquisitions for the NFL, NBA, and even James Bond films gave it premium inventory to sell.
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AI-powered targeting and measurement tools made its DSP an attractive option for marketers looking to cut through fragmentation in CTV.
The Netflix deal only strengthens Amazon’s hand, making its DSP the closest thing the industry has to a universal connected TV buying platform.
Netflix’s Path in Ads
For Netflix, the partnership is a pragmatic step. The company was late to advertising, initially resistant to the idea of diluting its “premium” brand with commercials. But slowing subscriber growth and competitive pressure forced its hand.
Since launching its ad tier in 2022, Netflix has built a base of nearly 100 million monthly users. Unlike Amazon, Netflix has pursued a more selective strategy, pairing ads with marquee content like Wednesday and the upcoming final season of Stranger Things. It has also begun investing in live sports, further expanding its premium ad inventory.
By leaning on Amazon’s DSP, Netflix gains access to advanced programmatic tools and a global pool of advertisers without having to build the infrastructure entirely on its own. It also ensures that Netflix ads are easier to buy, which could accelerate adoption of its ad tier.
The Bigger Picture: From Subscription Wars to Ad Wars
The Amazon-Netflix deal is another reminder that the streaming wars are no longer about subscriber counts alone. The battleground has shifted to advertising, where platforms are racing to capture billions in ad dollars migrating from traditional TV to digital.
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Linear TV ad spend continues to decline as cord-cutting accelerates.
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Connected TV ad spend in the U.S. alone is projected to exceed $40 billion by 2026.
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Advertisers increasingly demand consolidated platforms and robust targeting, areas where Amazon is positioning itself as the dominant player.
In that context, the partnership is less about two companies finding common ground and more about the inevitable consolidation of power around the largest players with the deepest data pools.
Conclusion
The Amazon-Netflix advertising alliance is a watershed moment for streaming and digital advertising. It solidifies Amazon’s DSP as the most comprehensive buying platform in connected TV while giving Netflix’s ad business a powerful boost in scale and accessibility.
But it also signals something larger: the era of ad-free streaming as the default is over. Nearly every major platform now offers (or defaults to) an ad tier, and consumers are increasingly choosing these cheaper plans. For advertisers, the streaming ecosystem is consolidating around a few dominant platforms—Amazon chief among them.
The subscription wars may have defined the last decade of streaming. The next decade will be defined by the ad wars—and Amazon and Netflix just formed one of the most formidable alliances yet.
