zlacker

This seems to be the sad reality of many paid services: paying is not a guarantee of freedom from advertisement, only a temporary respite. Being a paying customer is a very juicy datapoint, one that every one of these streaming companies eventually decides to capitalize on.

>>woodru+(OP)
You end up paying in three ways: (1) money (subscription fees), (2) data (you're forced to log in and allow tracking), and (3) the decrease in attention/focus caused by advertising.

All three prices can be ratcheted up over time mostly independently of each other. Price increases in (2) and (3) are largely invisible to the user.

>>ants_e+56
The problem is that in terms of revenue (2) and (3) are tiny compared to (1) because by tipping your hand that you value your time above a pittance, you reveal yourself to be much less cost sensitive, so they charge you a massive premium.

>>woodru+(OP)
The problem is: even at a higher price point, the ad-free versions generate less revenue.

"“We’re obviously trying with our pricing strategy to migrate more subs to the advertiser-supported tier,” Disney Chief Executive Bob Iger said in August during a call with investors to discuss the company’s quarterly results."

"Disney, Netflix and Warner Bros. Discovery have recently said the ad-supported versions of their streaming platforms generate more money per user than their ad-free counterparts, as the advertising revenue more than offsets the lower subscription cost." -- https://www.wsj.com/business/media/netflix-price-increase-ac...

"Netflix executives have said that the ad tier brings in more average revenue per user than its $15.49 standard plan." -- https://www.wsj.com/articles/netflix-reworks-microsoft-pact-...

>>ksherl+f7
Thanks for those links. This indicates that (1) users consistently undervalue their ad data, or (2) the ad data market is misfunctioning (since so many of these companies go on to spend billions on advertising their own unprofitable services). Or both!

The entire situation is ridiculous. We’ve somehow managed to build an even more exploitative user-service relationship than Cable TV.

>>jdewer+F6
This was what I thought too, but ‘ksherlock has provided some links above that suggest the opposite: paid subscribers are less profitable than their ad-viewing counterparts.

>>woodru+G8
This is what I would have guessed, or otherwise it would be hard to explain why e.g. YouTube stuck with a purely ad-driven model for so long. Also subscribers usually get unlimited content for a flat fee whereas ads-based users pay incrementally for bandwidth and resources consumed.

I think it's possibly useful to think of the revenue streams as a form of diversification. For example, there's value in Google diversifying some of their dependence on ad revenue.

>>woodru+28
ads have two functions: to drive more traffic, and to preserve mindshare for existing brands. Coke is not buying ads because you don't know what Coke is, Coke is buying ads so that Pepsi or somebody else's ad doesn't take your mindshare away.

>>woodru+G8
Huh, thanks for the heads up. The situation has evolved since I last saw numbers. That's wild.

>>bobthe+oa
Right, but neither of these functions explains the circularity: if Netflix loses money on every paying subscriber versus the "ad watching sucker" demographic, why spend billions of dollars a year[1] advertising your paid plans?

(Maybe I'm being too literal here -- it'd be fair to argue that Netflix mostly just advertises their shows, not the plans themselves directly.)

[1]: https://www.statista.com/statistics/688525/netflix-ad-expens...

>>woodru+tc
Where do they say they lose money on ad free paying subs? Maybe they make less profit than on free ad users.

>>bellta+5f
Sorry, bad phrasing -- they don't lose money in an absolute sense, but make less on full-paying users than ad-watching ones.

>>woodru+(OP)
The only way out of this is to find a way to make ads not make as much money. Something like a consumer union but we attempt to organize to reduce the ROI for advertising. Boycott things you see ads for, purchase fewer things overall, and of course, relentlessly block ads.

>>woodru+tc
Some advertising of the ad-free paid plans is good because it takes the segment of customers who will not tolerate ads and gives them an option, rather than lose them.

>>ants_e+A9
I don't think it's diversification, I think they just have to have the option to point the complainers and regulators at. They don't actually want anyone to use that option any more than they want anyone to use firefox while they pay to keep firefox around.

>>bobthe+oa
Reminds me of the mindblowing album Dispepsi by Negativland: https://www.youtube.com/watch?v=b8S3xlIXObA

>>ksherl+f7
One article says their rate is $55 CPM[0][1] & the ad supported subscription costs $6.99 vs $15.49 so $8.50 difference.

So if a viewer watches 155 ads (impressions) in a month they have earned Netflix more money with their eyeballs than they saved in subscription cost.

Netflix says people should expect “about 4 minutes of ads per hour” which is notably not directly equivalent to impressions. If each ad is 30 seconds it takes about 39 hours to reach 155 ad impressions. That’s close to 80 minutes per day each month.

Another way of looking at it is that you get paid $6.58 per hour to watch ads, up until you’ve watched 77.5 minutes of ads. After that you are paid $0 to watch ads.

[0] https://digiday.com/media-buying/netflixs-cpm-still-under-bu...

[1] They also say it was reduced from $65 (131 impressions) and plus this is a sales game so the rates will be up and down all the time based on KPIs and competitions to win steak knives and more comprehensive media buy deals.

>>ksherl+f7
If that is true then just give it away. It galls me to hear that the ad driven product makes more than the product I pay for. Here’s a deal, I’ll keep watching, you show me ads and we’ll share in the revenue.

>>woodru+28
People still paid for Cable TV and got ads too. And I'd go crazy if I had multiple in a row Cable TV ads on youtube like it is on TV without the option to upgrade to premium.

>>woodru+(OP)
This isn't even close to new. Newspapers and magazines have double dipped for a very long time.

>>ksherl+f7
But do they account for people like me who after seeing too many ads just say "Fuck it, I'm out of here"? Cable TV companies also tried to show bunch of ads to already paying customers who then started leaving in droves as soon as there was a way out[0].

[0]: https://www.statista.com/topics/4527/cord-cutting

>>dmix+bo
At first Cable TV networks had little advertising. It seems to be a natural progression of all mass-media to eventually enshittify. It's not if, it's just when?

>>127361+691
> At first Cable TV didn't have any ads.

100% non-factual. Cable had ads from day one, and the majority of cable-only TV channels had ads from their first day of programming.

>>ajkjk+uf
Advertising has existed ever since commerce was a thing, because of supply and demand mismatch. Boycotting advertising is just nonsense and as virtual signaling as it can get. Ask any business owner.

We want our privacy to be respected. We want to prevent false advertising. We can’t and don’t want to ban all advertising.

>>vel0ci+jk1
Likely fewer ads at the beginning, and then gradually more with time. Sorry. I'll edit my post.

https://www.nytimes.com/1981/01/11/us/advertisers-look-close...

>>signat+qq1
Maybe not all, but I want to ban most advertising.

Ads in public spaces, such as on billboards, buildings, taxis, etc. should be illegal. Being in public is not an agreement to receive advertisement.

Any product or service that has advertisements should at least be forced to offer a reasonably-priced paid version. This goes for streaming services as well.

This also goes for things like TVs. Why does my TV try to advertise to me? By allowing it, we end up with all products trying to advertise to us, and living in an ad-filled hellscape with no escape.

Advertising may have existed as long as commerce, and there may be appropriate forms, but it's getting worse and worse.

I don't want to have to "drink a verification can of mountain dew" or keep my eyes open while forced to watch ads in my own room, as in that Black Mirror episode.

>>signat+qq1
Speak for yourself.

>>127361+2t1
The 10x of revenue increase projection in five years is potentially due to the fact cable subscribership increased 2x in those 5 years, several more cable-only channels that came out, and the market for cable advertising became more proven thus the perceived value of each ad increased. It doesn't require there to be considerably more ads shown per hour of television. Your article isn't exactly strongly supporting your claims as well as you might think it does.

But I do agree, over the years there has been more advertisements per hour of television.

>>woodru+(OP)
The sad reality is that consumers are ever more spineless. This particular kind of rip-off started years ago when cable companies got away with charging for ad-riddled channels that used to be part of "basic cable."

Amazon will probably get away with this, just as Apple got away with removing the headphone jack from its best-selling music player. Watch apologists fall all over themselves to excuse it, and attack those of us who decry rip-offs like it.

"You're posting too fast. Please slow down"

Then WHY WAS THE REPLY BUTTON ENABLED? There is no excuse for this rudeness. Why are we expected to put up with it, year after year after year? Deliberately stealing from users is NOT OK, EVER. Why does HN do it?

>>signat+qq1
> We can’t and don’t want to ban all advertising.

I'm pretty anti-ad, but I agree with this!

I don't personally want to experience any ads, but the only ads I want outright banned are those that are effectively shown to me without my consent, and that can't be reasonably avoided - billboards, and PA-broadcast ads on airplanes come to mind.

I'm ambivalent about ads in media. If I can't watch/listen to something ad-free, I just won't consume that content.

>>woodru+bf
media is always about network effects. you want to talk to your friends about big shows. that only works if they watch the big shows, ad-free or not.

>>ksherl+f7
Double dipping will always be more profitable.

Think about it, people pay you a monthly sub and you get paid per ad you show?

From an executive POV it’s delicious. And there’s no real way of competing with a flat fee all you can eat sub unless you hike up that price astronomically, because pay per ad will almost always outpace the sub fee.

>>dehrma+vu
They don't force you to look at ads for a set amount of time though.