I bought Prime mostly for the delivery so I likely won’t stump up the extra for ad free videos. The selection of films is generally pretty old and the same things come on and then drop off fairly frequently - so if the money genuinely goes to fund a better selection then that would at least be an improvement.
One thing that bugs me, and its not unique to Amazon, or to streaming, is that the UK increase is £2.99 and the US increase is $2.99, so you’re paying more (and its not even close) in some countries compared with others. And unlike the free delivery element, the geographic size of the country isn’t relevant to how easy/costly it is to provide the streaming service, so there’s no reason for it except the extra revenue.