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People Love Ad-Based Streaming TV

People say ad-based streaming TV solves first-world problems like choice paralysis and loneliness—and they even watch the ads. What does it mean?

Some of us recall when commercials were just part of the TV experience. We didn’t have to watch the ads back then—but we also didn’t need to pee every 15 minutes or have smartphones to distract us during toothpaste pitches.

Then VCRs gave us the power to record shows and watch them later, euphorically fast-forwarding through the ads (and—ahem—pausing shower scenes). DVRs expanded on that feature, ditching bulky tapes for hard drives and letting us avoid ads by pressing a button. Then Netflix introduced streaming TV, which had no ads to skip. Oh, blessed technology!

Netflix now offers an ad-based video-on-demand (AVOD) plan—so do Disney+, HBO Max™, Peacock, and Paramount+—and, after a shaky start, it’s kinda kickin’ ass. Netflix Standard with Ads ($6.99 monthly) now has over 1 million U.S. subscribers, and the company didn’t expect to hit this figure until the end of 2023.

An illustration of a man watching TV inattentively.

(Image by Mohamed Mahmoud Hassan)

How much can you save with the Netflix ad-based plan?

Netflix Standard with Ads ($6.99 monthly) saves you $3.00, $8.50, or $13.00 a month over the Basic, Standard, and Premium plans.

Meanwhile, AVOD and free, ad-supported streaming TV (FAST) services like Pluto TV and Tubi are shockingly popular, given how much we as a culture love to skip ads. In a Paramount survey, most respondents report liking these services for several reasons:

  • Companionship: If you’re alone at home, you can switch on live TV to tune out loneliness.
  • Convenience: Something’s always on live TV, so you can thwart choice paralysis by watching whatever’s already on.
  • Distraction/mood boost/reward: After a long day at the office or school, watching a free movie helps you forget and recharge.
  • Exploration, quality, and variety: For being free, AVOD and FAST services have surprising content quality, quantity, and variety.

Obviously, affordability—getting all of the above for free or cheap—powers these benefits.

What’s more, a recent survey by Yahoo and Publicis Media reported that 82% of people expect ads on free streaming services, and, shockingly, they watch the ads.

What in the bizarro future is happening? Will the success of AVOD and FAST services send us back to the old ad-stuffed, linear way of watching TV? We doubt it.

There will always be a market for ad-free streaming TV but, given consumers’ acceptance of and response to AVOD plans, it could eventually cost us more. Plus, when Disney+ debuted its ad-based plan in August 2022, it raised its ad-free plan pricing by 38% with only minimal subscriber loss. My wallet hurts already.

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