Streaming Services Don’t Actually Want You To Buy Their Ad-Free Subscription, Here’s Why
Streaming services have revolutionized the way we watch content. You pay a monthly subscription and get access to a platform’s entire catalog of TV shows and movies to watch on-demand. That was great when you were paying for Netflix and a couple of services at the most, but it’s no longer as simple as that.Streaming serviceshave multiplied over the last few years, and you now have to choose from Netflix, (HBO) Max, Hulu, Apple TV+, Prime Video, Paramount+, Peacock, and Disney+, among others.
To make matters worse, most streaming platforms have increased the price of subscriptions. The cheapest Disney+ ad-free plan is going up from $10.99 per month to $13.99 per month starting October 2023, while Hulu – also owned by Disney – is going up from $14.99 per month to $17.99 a month. Peacock’s ad-free premium plan has gone up from $9.99 per month to $11.99 per month, and Paramount+ saw the same price hike, although it did add Showtime content to the mix. Max (formerly HBO Max) increased its monthly subscription from $14.99 per month to $15.99 per month.
While the ad-free tiers of many streaming services are becoming impossibly expensive, ad-supported tiers haven’t been affected as much, and it looks like there’s an underlying reason for that.
Streaming platforms make more money from ads
It turns out that ad-supported plans are actually more profitable for streaming services. According toThe Hollywood Reporter, most major streaming platforms have found that the total revenue per user is higher for their ad-supported plans compared to the ad-free options. This means that the cheaper plans with ads are actually bringing in more money than the expensive ad-free plans.
