GoKawiilis a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.
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How it started
Streaming was once a reprieve from cable. Not only could you watch whatever you wanted at any given time, but you didn’t have to sit through five-minute-long commercial breaks. And the best part was the price: Netflix, for example, cost just $7.99 / month when it launched its standalone streaming service in 2010. Amazon’s Prime Video was the same, offering ad-free streaming as a perk with its Prime membership. Hulu was an outlier at the time, but that’s because it allowed you to stream ad-supported TV shows and movies for free. It later added a $7.99 / month Hulu Plus subscription, with limited advertising.
But the commercial-free streaming model was so appealing that when companies launched rival streaming services, most made them ad-free by default. Disney Plus cost $6.99 / month when it launched in 2019, followed by the $4.99 / month subscription to Apple TV, and the launch of HBO Max’s $14.99 / month streaming service. (There were some exceptions, of course, like Paramount Plus, which launched with ads for $4.99 / month, and NBCUniversal’s Peacock, which offered some titles for free alongside a $4.99 / month ad-supported tier with access to all of its shows and movies.)
As the streaming industry matured and viewers settled into the services of their choice, many executives soon realized that they couldn’t make money just by adding new subscribers in an already saturated market. Moreover, Netflix lost subscribers for the first time in more than a decade in 2022, while the streaming businesses run by its competitors remained unprofitable. Streamers needed a solution — especially so they could keep spending the billions required to fill their libraries with movies and TV shows.
How it’s going
In between steady waves of price hikes, major streaming services have adopted advertising one by one in a bid to boost profitability. HBO Max first rolled out a cheaper, ad-supported tier in 2021. Even Netflix, whose former CEO Reed Hastings said the service would never have ads, walked back on its promise by introducing its ad-supported plan in 2022. Disney Plus followed suit, and Amazon Prime Video automatically placed its subscribers in an ad-supported tier, forcing them to pay extra to get access to commercial-free viewing.
Now that nearly all of the most popular streamers have ads, the pricing gap between ad-supported and ad-free tiers has grown wider. Streaming services often target ad-free tiers with the biggest price increases, with Netflix most recently raising the price of its standard and premium plans by $2, compared to $1 for its ad-supported tier. Now, the price to go ad-free on Netflix is $19.99 / month (or $26.99 if you want 4K HDR) — more than double the original $7.99 / month subscription.
HBO Max similarly issued a $2 hike for ad-free subscriptions last year. It now costs $18.49 / month for its standard plan or $22.99 / month for premium, a sizable leap from its original $14.99 / month ad-free subscription. Prime Video also doubled the price to go ad-free earlier this year and locked 4K streams behind the pricier, $4.99 / month subscription that gets tacked onto your $14.99 / month Prime membership. And Disney Plus, which once offered an ad-free subscription for $6.99 / month, now costs $18.99 / month commercial free.
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