note: I hate ads so I'm not trying to manifest this, but can you explain why you're so sure of this?
To me, it seems like they "should" (for greed reasons, I mean, not for my happiness) hike the prices of subscriptions aggressively while keeping the ad-tier attractively-priced, moving as many people as possible over. This increases ad revenue and allows more YoY growth if their ML can manipulate you into more watch hours in 2027 than you do in 2026.
Sure, some people like me will probably drop Netflix before they'll pay $35 a month or endure ads. But the current delta is only $10. I suspect they can make $10 a head in ad revenue in a year -- and if they can make $15, they would break even if they lost 3 ad-free subscribers but gained 2 back onto the ad tier. Anything better than those numbers would be a net gain.
Because the way subscription revenue is accounted for is a present value of the expected duration of the subscription and ad revenue is cyclic and varies throughout the year across individuals, cohorts, and the population. They’re also generally different markets - people willing to endure ads are either unable to afford the subscription or cheap, in either case it’s not unreasonable to expect the impression value for ads is pretty low.
Welcome to 2022 or so. I thinl Hulu started it, but yea. Many "premium" services are back to ads again on the lowest tier. It's probable more expensive than the highest tier 10 years ago as well.
note: I hate ads so I'm not trying to manifest this, but can you explain why you're so sure of this?
To me, it seems like they "should" (for greed reasons, I mean, not for my happiness) hike the prices of subscriptions aggressively while keeping the ad-tier attractively-priced, moving as many people as possible over. This increases ad revenue and allows more YoY growth if their ML can manipulate you into more watch hours in 2027 than you do in 2026.
Sure, some people like me will probably drop Netflix before they'll pay $35 a month or endure ads. But the current delta is only $10. I suspect they can make $10 a head in ad revenue in a year -- and if they can make $15, they would break even if they lost 3 ad-free subscribers but gained 2 back onto the ad tier. Anything better than those numbers would be a net gain.