The Disappointing Trend of Streaming Services and the Rise of Advertisements

The Rise and Fall of Streaming: A Dominant Method of Entertainment

Streaming once seemed like the solution to all of cable television's problems, but another platform introducing ads calls this into question and continues a disappointing trend. Today, streaming has become the dominant method of consuming entertainment. It has revolutionized the industry in a number of ways, including providing on-demand access for viewers and offering more flexibility and affordability both of which were improvements upon linear television. Streaming even allowed for content to have a larger global reach, which opened doors for international productions to find massive audiences like Squid Games. These streaming platforms heavily investing in original content to set themselves apart also benefited viewers, as it led to shows like House of Cards and Stranger Things.

How streaming changed the way we watch tv

Unfortunately, though, it now seems that the streaming services are losing what made them so appealing in the first place. A major factor of streaming was being able to watch content without the constant interruption of ads. It made viewers feel more in control of their watching experience, as they could not only play whatever they wanted, whenever they wanted but could also do so without any pauses. As streaming platforms try to compete with one another and generate increased revenue, many have turned to ads. This has diminished the overall experience for consumers and has led to speculation about what the future of entertainment holds.

Prime Video's Ad Introduction and the Impact on Subscribers

Starting January 2024, Prime Video will be showing ads on its content unless subscribers pay an additional fee. This $2.99 fee will enable viewers to continue watching Prime Video without ads, as they had been doing before. Amazon has indicated that the reason behind this decision is to be able to continue to invest in content that audiences enjoy and increase that investment over time. While the company has promised that it will have 'meaningfully fewer ads' than standard TV and other streaming TV providers, this decision continues a very disappointing trend.

The logo for Amazon Prime Video

In 2022, Netflix launched an ad-supported plan that is cheaper than the alternative ones. That same year, Disney Plus launched its ad-supported tier. It also increased the price of its ad-free subscription from $10.99 to $13.00. Before that, Max introduced an ad-supported option as their lowest pay tier. In addition, the aforementioned platforms, Hulu, Peacock, Sling, and Paramount + all offer ads, and many charge subscribers more to remove them.

According to BBC, the reason behind this trend is that streaming services have been facing massive amounts of debt. This debt comes at the hands of investing in content, licensing fees, and other expenditures that come with trying to expand libraries and compete with other services. As they try to make a return on their investments, the financial burden falls on the consumer by having them pay for an ad-free experience.

The Impact of Advertisements on Consumer Behavior

At this point, it is much more common for a streaming platform to have an ad-supported option than for one not to. One of the initial appeals of streaming was that it was an ad-free experience. Users were able to watch content whenever they pleased without having to sit through ad after ad. Part of this appeal is now lost, as ads continue to inundate almost every streaming platform. While it is completely understandable for platforms to try to boost revenue and increase profitability, this method of doing so may end up costing them in the long run.

Streaming has become deeply ingrained into modern life, and it is hard to imagine a world where consumers turn to linear television to serve their needs again. BBC reports, though, that in September of 2023, streaming services saw their highest churn rate ever recorded, with about 6% of all streaming subscribers in the United States canceling their services. While this is definitely an indication that consumers are beginning to get fed up with the rising costs of streaming services and being bombarded with ads, it is unlikely that linear television will become the dominant method of entertainment once again.

A man watching Samsung TV Plus on a Samsung TV

Instead, consumers will most likely be more intentional about which streaming services they subscribe to. For many, it is no longer reasonable to have subscriptions to all of the major platforms. It is highly possible that consumers will now choose to pay the additional fee to have ad-free viewing on one or two platforms, instead of having as many subscriptions as before. As streaming platforms begin to see the trend of September continue, they might re-evaluate their pricing strategies as well.