Remember the days when streaming music and video content was new? The possibilities that came with the ability to stream content from anywhere was quite exciting. The flexibility and mobility that streaming services provided was a significant improvement from the limitations of cable television, and content was suddenly able to be viewed on-demand rather than according to a network’s schedule. Plus, commercial-free streaming meant no longer having to deal with those pesty interruptions and annoyances. But as time has passed, streaming services have increasingly looked more and more like the cable television of old. Specifically, streaming services adding ads unless customers are willing to pay extra is becoming increasingly common.
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In the latest news, Amazon announced it would start charging its Prime Video members an add-on fee for commercial-free streaming. After years of ad-free content, users faced a choice of paying to preserve that luxury or face commercial interruptions. Amazon isn’t alone in this regard as there are several streaming services adding ads to its content. As a result, it seems streaming services are looking more and more like cable television every day. Streaming still offers flexibility, mobility, and on-demand benefits. But the price of having these inherent advantages just went up, whether its monetary costs or attention-related ones. And consumers will have to decided which is the least of two evils.
Comparing Cable to Streaming
When streaming services expanded over the years, there were three key areas that made it attractive. In addition to the flexibility and mobility, streaming services were much less costly when compared to cable. Cable costs had progressively increased over the years, and options for streaming videos were much less. This was particularly true for those only wanting to stream select items rather than a broad array. At the same time, however, cable television content quality had declined. One could literally scan through dozens of channels before finding something worth watching. Streaming services avoided this problem because of its on-demand nature. These perks continue to make streaming services preferred over cable television today.
While these features encouraged consumers to make the switch from cable to streaming, other incentives also existed. Commercial-free streaming was a breath of fresh air considering how inundated television programs had become with ads. Streaming content without interruptions was notably preferred by many. For a small subscription fee, users could enjoy commercial-free streaming to their heart’s content. Basically, streaming was cheaper, better quality, more convenient, and ad-free when compared to cable. Thus, it’s not surprising most chose streaming subscriptions over television in time. Now with streaming services adding ads, the comparison is not as great as it used to be. And some are reassessing their options once again as a result.
Under Pressure to Add Ads
Amazon’s recent plans to increase subscriptions fees to continue to enjoy commercial-free streaming shocked some. In essence, for the same subscription price, customers would now be subject to intermittent ads. Or, for a higher subscription fee of a little under $3, these could be avoided. The bottom line is Amazon offered no additional value for the extra fee and instead changed its streaming services’ terms. This sounds a lot like cable company practices back in the day. Of course, Amazon isn’t the only current commercial free streaming service to make this move. Netflix, Hulu, and others will likely follow as well given the pressure many companies are under to earn profits. In fact, other than Netflix, other major streaming platforms for video content aren’t consistently profitable. That’s why streaming services adding ads to their existing agreements and services can be expected.
One of the most significant drivers for streaming services adding ads relates to the cost of content production. For example, some of the higher quality programs on Netflix costs as much as $20 million per episode. Other commercial-free streaming platforms spend amounts even greater than this. While subscription rates help cover these costs, rising competition among streaming services reduce numbers of users. In addition, streaming services bundles offer access to several options. But it also comes at a much higher price in an effort to monetize streaming content. This too reduces the numbers of available consumers for any given platform. Understanding this, it’s not that surprising streaming services adding ads is a thing. In many ways, streaming looks to be traveling down the same path as cable television decades past.
It’s Not Just Streaming Services
It has been said that all good things must come to an end. To an extent, it seems that statement pertains to commercial-free streaming. With streaming services adding ads or increasing subscription fees, the good ol’ days may be passing. Digital marketing looks to be invading. But it’s not just video content streaming services moving in this direction. Other apps and technology services are doing the same. For example, Uber app now runs ads while customers are waiting on rides. This helps keep rates lower than they otherwise would be. Amazon’s Alexa voice assistant also now has commercials as well as a revenue-generating strategy. Even TikTok Shop has gotten in on the ads game. From music streaming platforms to a variety of other apps, ads are again creeping into our lives. Streaming services adding ads is just one of the many in this regard.
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It should be noted that unlike the cable television industry, advertising remains in its infancy when it comes to streaming services. Commercials tend to be poorly innovative in nature, and the same ad appears repetitively, which contributes to the irritation. In addition, as it relates to video streaming services adding ads, interruptions are often poorly timed. All of these factors encourage customers to pay the extra fee for commercial-free streaming. But as costs build, there comes a point where users will have to make the tough choice. This may mean limiting the number of streaming platforms, or it might mean tolerating ads again. After having the luxury of commercial-free streaming for years now, the latter could be a difficult pill to swallow. But this is the quandary that streaming customers currently face today.
