Ad-free streaming is a luxury now | The Verge

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Steady price increases are pushing viewers toward cheaper, ad-supported tiers.

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Streaming was once a reprieve from cable. Not only could you watch whatever you wanted at any given time, but you didn’t have to sit through five-minute-long commercial breaks. And the best part was the price: Netflix, for example, cost just

But the commercial-free streaming model was so appealing that when companies launched rival streaming services, most made them ad-free by default. Disney Plus cost

As the streaming industry matured and viewers settled into the services of their choice, many executives soon realized that they couldn’t make money just by adding new subscribers in an already saturated market. Moreover, Netflix lost subscribers for the first time in more than a decade in 2022, while the streaming businesses run by its competitors remained unprofitable. Streamers needed a solution — especially so they could keep spending the billions required to fill their libraries with movies and TV shows.

In between steady waves of price hikes, major streaming services have adopted advertising one by one in a bid to boost profitability. HBO Max first rolled out a cheaper, ad-supported tier in 2021. Even Netflix, whose former CEO Reed Hastings said the service would never have ads, walked back on its promise by introducing its ad-supported plan in 2022. Disney Plus followed suit, and Amazon Prime Video automatically placed its subscribers in an ad-supported tier, forcing them to pay extra to get access to commercial-free viewing.

Now that nearly all of the most popular streamers have ads, the pricing gap between ad-supported and ad-free tiers has grown wider. Streaming services often target ad-free tiers with the biggest price increases, with Netflix most recently raising the price of its standard and premium plans by

HBO Max similarly issued a

There’s a strategy behind this: Executives across the streaming industry have reported earning more average revenue per user (ARPU) on ad-supported tiers, as they rake in cash from viewer subscriptions and the ads they sell to them. In January, Netflix said its advertising business earned

More people are signing up for these ad-supported tiers as commercial-free plans grow more expensive. Among streaming services that offer cheaper, ad-supported plans, nearly half of their current subscribers in the US have signed up to the tier with ads, according to research from the analytics firm Antenna.

Apple TV remains the only major streaming service that doesn’t offer an ad-supported subscription — though questions remain about how long it will hold out. Apple currently shows ads during live broadcasts like Major League Soccer games. While some have speculated about Apple bringing ads to the rest of its service, the company pushed back on rumors, with its head of services Eddy Cue saying, “I don’t want to say no forever,” but “there are no plans.” Apple TV has steadily raised prices alongside other streamers and now costs $12.99 / month.

Meanwhile, Netflix is finding more ways to show ads to viewers, such as allowing brands to use AI to “blend” their ads with one of Netflix’s shows or movies. Other streamers are experimenting with different kinds of ads as well, with Peacock showing them on the profile selection menu and others invading paused screens. Unfortunately, viewers on a budget really have no other choice but to deal with ads — many of which are very repetitive or appear at the wrong times.

That’s why some viewers are looking toward alternatives, like the ad-filled but free-to-watch You Tube, which remains Netflix’s biggest rival, and free ad-supported streaming TV (FAST) services such as Tubi, Pluto, and The Roku Channel. Some services are trying to balance affordability with ad-free streaming, with the Roku-owned Howdy offering over 10,000 hours of TV shows and movies without commercials for $2.99 / month.

While some of these options may serve as a temporary haven from high prices, they just don’t have the premium titles streaming has become known for. It’s become more expensive than ever to access shows and movies without interruptions, taking away what drew most people to streaming in the first place.

Fox’s plans to acquire Roku could benefit both companies: Roku by potentially being able to tap into Fox’s library, and Fox by getting a hold of Roku’s trove of user data.

Surging subscription costs have led some viewers to pirate cable using rogue streaming boxes.

As Netflix snaps up You Tube’s top talent, You Tube is hitting back by launching exclusive shows of its own, starring big names like Trevor Noah and Alex Cooper.

How much would you pay to get rid of ads? This survey from Consumer Reports found that 3 in 10 people subscribed to an ad-supported tier would pay less than $5 more to go ad-free. It also has some other fun tidbits about how annoying people find ads while streaming, and when they think is the best time to see commercials.

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