For everyone who feared that the streaming service landscape would eventually be littered with advertisements, the earth moved another couple of inches in that direction last week.
Leading the concerns is Disney+. It’s only been a half year since Disney+ raised its ad-free subscription price, but its latest subscription totals have hit the wall.
The company now has 4 million fewer subscribers, but as the company frames the narrative, that’s okay. The Mouse’s spreadsheet shows that it’s actually closer to profitability because its losses are down 26% year over year. CEO Bob Iger likes what he sees so much that he’s indicated that Disney+ will raise prices again for its ad-free option before the year’s out.
Disney also announced last week that it'll start piping content from Hulu into its Disney+ app later this year.
Ads are where it’s at
“The sad truth is that viewers who watch ads are better for business than those who don't. Commercial-free TV will become more of a luxury as a result,” says TechHive’s Jared Newman. In other words, consumers better start getting comfortable with ads, because they'll have to pay through the nose to avoid them.
Newman looked all the way back to 2019 to find out how we got here. It all began with Hulu which was the first to figure out that it could carry more money to the bank from ad-supported viewers than ad-free ones.
Even though the ad-supported customers paid less, the company made tons more simply because of all the money it made serving ads to those customers.
Eventually, that same light bulb lit up at Netflix. It too, says that its $6.99-per-month plan with ads brings in more money per subscriber than its standard $15.49/mo. plan in the U.S.
Others want more money, too, whether it’s from ad-free or ads-on options. HBO Max – er, make that just “Max” – is in the with-ads world too, and recently raised its monthly price by a dollar. A dollar might not sound like much, but it can add tens of millions a month to the company’s checking account.
Will Disney+ follow? Newman says it hasn’t shown its hand in that regard, yet. However, on a recent earnings call, Iger said his company’s last hike had “proven successful,” and that the next one will “better reflect the value of our content offerings.”
Read those tea leaves as you like.
Tom and Charlotte rule the world
Reelgood – a streaming aggregator and app recommended earlier in ConsumerAffairs feature about streaming services – tells ConsumerAffairs that its eyeball-driven Top 10 is packed with new favorites this week. Tom Hanks’ comedy-drama movie A Man Called Otto and original show Queen Charlotte – both on Netflix – secured their place among the most popular titles this week, along with AppleTV+’s Silo at number three.
The entire Top 10 streaming shows go like this:
A Man Called Otto (Netflix)
The Diplomat (Netflix)
Jury Duty (available on Amazon's freevee)
Silo (on AppleTV+)
Queen Charlotte (Netflix)
Ghosted (on AppleTV+)
Scream VI (Paramount+), and
Peter Pan & Wendy (Disney+)