Amazon is still a minor player in video advertising

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• Amazon is launching a free, ad-supported app for its Fire TV devices, according to The Information.
• But the app is unlikely to command a huge audience, limiting how much ad inventory Amazon will have to sell advertisers.
• At the moment, Amazon remains a minor player in video advertising, and doesn’t seem to be moving aggressively on that front yet.

Amazon is preparing to launch a free, ad-supported video app called Free Dive, according to The Information.

But when it comes to Amazon’s ambitions in video advertising, the e-commerce giant appears only to be dipping its toe in the water rather than diving in head first.

According to the Information, the Free Dive app will offer Fire TV users access to older ad-supported shows. It’s hard to assess how well this will work without seeing it or combing through its content library, but it doesn’t sound like YouTube, Facebook, Hulu, or the broadcast networks should be worried.

There are already a handful of ad-supported web services built on random assortments of older films and TV shows. Think Sony’s Crackle, which despite being around for a decade has never exactly made the digital titans sweat.

Add to that list ‘AVOD’ (ad-supported video-on-demand) sites/apps such as Pluto TV and Tubi TV. These are fine services, with loads of free, albeit random content. They’re ideal if you suddenly desire to stream “Short Circuit” or season three of “7th Heaven.”

But they’re also not what people are talking about when they mention peak TV.

Amazon

Is Free Dive going to be a big business for Amazon? Again, that’s hard to know.

“It could just be a test,” said Lance Neuhauser‏, CEO of the marketing tech firm 4C, which recently inked a deal with Amazon. “Or, it could be Amazon going after the cable advertising industry.”

If there’s one thing Free Dive will have going for it it’s the prime real estate the app will likely get in the Fire TV interface.  However, major broadcast networks find it hard to get people to use their OTT apps when most Fire TV users are looking for Netflix, or Amazon’s own premium, ad-free service.

And is Amazon likely to shell out the kind of cash needed to land big recent TV hits, e.g. “Breaking Bad” or “The Walking Dead,” the kind of shows that have helped drive Netflix’s success — when it’s already spending billions to fund originals like the upcoming “Lord of the Rings” show for its ad free service?

More likely, Free Dive is going to feature old library content. Probably not game changing, binge-worthy stuff.

Of course, it would be a mistake to every take anything Amazon tests lightly. The e-commerce Juggernaut may very well look to totally disintermediate and dominate video advertising at some point.

But this ad-supported app feels far from a tidal wave.