Prepare for the age of ad-supported streaming.
Services like Netflix are defined by ad-free streaming. But this business model is getting more expensive every year and customers are starting to feel the pain. Ad-supported streaming is the only solution, it’s cheap and profitable, and in a few years it will become the norm.
The era of cheap ad-free streaming is over
Streaming services used to be serious business. Netflix originally only charged $7.99 per month and offered an incredible library of shows and movies – it was a clean and engaging alternative to cable TV.
But the era of cheap streaming is over. Services like Netflix and Hulu now cost between $12 and $15 per month. And now that every media company has a single streaming platform, customers who want a wide selection of shows and movies are forced to join multiple services.
Let’s do some math. As of October 2022, customers who subscribe to Hulu, Netflix, HBO Max, and Disney+ ad-free pay a total of $48 per month for streaming. That’s $576 a year, which is a ridiculous amount of money, especially during an economic downturn.
If you haven’t felt the sting of these rising costs, wait. Streaming services are trying to eliminate password sharing, and Netflix is leading the charge. Additionally, outside companies are now seeing “password cracking” as a business opportunity. Adobe recently offered an “anti-piracy” tool to help streaming services fix this problem and recoup “lost profits.”
To be clear, I believe the current streaming market is a product of corporate greed, incompetence, and myopia. In the early years, services like Netflix were so determined to dominate the streaming business that they created an untenable environment – IP addresses are overpriced, billion-dollar bidding wars are the norm and Expensive new content is carelessly pumped in the hope of stumbling upon a hit.
I would love to go back in time and grab some CEOs by the collar. We could have avoided this mess. But that ship has sailed, and ad-supported plans are the future of streaming.
Ad-supported streaming will become the norm
As of 2022, ads are the biggest trend in streaming. All major services, including Disney+, Netflix and HBO Max, now recognize that ads will reduce rising costs for consumers and produce a steady stream of profits.
Customers are weary of these ad-supported plans, which always seem to debut alongside rising prices. But ad-supported plans will serve their purpose: they’ll keep prices low. And you only have to watch Hulu for proof.
Hulu was launched in 2007 as a free, ad-supported service. Its only paid subscription tier, called “Hulu Plus,” unlocked a bunch of popular shows for $7.99 but didn’t remove ads.
Today, “Hulu Plus” is called “Hulu with ads”. Its price tends to fluctuate, and most importantly, it fell to just $5.99 per month in 2019. But today it costs $7.99, the same price users paid over a decade ago. . (For comparison, Hulu’s ad-free plan debuted for $12.99 in 2015. It now costs $14.99 per month.)
Obviously, ad-supported streaming plans are profitable enough to keep the price competitive. And in some situations they can be After more cost-effective than ad-free subscriptions. A New York Times A 2019 article details how Hulu earns an average of $15 per subscriber each month. Hulu’s ad-free plan was only $12.99 per month in 2019. The extra money came from ads!
As streaming prices continue to rise, ad-supported subscriptions are set to become the norm. There is simply no other option. Customers can’t afford to pay $15-$20 a month for multiple services, but they will pay half that price and tolerate some ads.
We won’t enjoy the ad-supported lifestyle
If we’re lucky, the ad trend could mark a new “golden era” of streaming: we haven’t enjoyed cheap or consistent prices in nearly a decade, and streaming services can produce content exciting through increased cash flow.
But we shouldn’t be celebrating the transition to ad-supported streaming. Ads frustrate viewers and, more importantly, they tarnish the streaming experience. Modern shows like stranger things feel so theatrical and binge-worthy because they are designed for ad-free viewing.
Moreover, ad-supported streaming will not solve corporate greed or incompetence. Streaming services will continue to make decisions that hurt customers – the early years of ad-supported streaming will be tolerable, but at some point ads will become more frequent and prices will rise.
What can you do?
The transition to ad-supported streaming is inevitable. But ad-free streaming subscriptions will continue to exist. If you hate ads, I suggest getting into the habit of “twisting” your streaming services.
It’s a pretty simple concept; instead of paying for a dozen streaming services, pay for one ad-free subscription at a time. Join Netflix and immediately cancel your subscription so that it doesn’t renew at the end of the month. Then, if HBO Max launches a cool show, you can join its service. Build, repeat and enjoy cheap ad-free streaming.
You can also invest in physical media. I know DVDs and Blu-Rays are very expensive on Amazon, so you should check out thrift stores, flea markets, and exchanges. Nobody wants discs anymore, so aftermarket DVDs and Blu-Rays are a pretty good deal.
Keep in mind that physical media can be digitized. And if you set up a Plex server, you can stream that media from anywhere — you can build your own ad-free streaming service.