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Ad-ing up

Turns out Netflix makes more money if it just acts like regular TV

Streaming companies will let you watch ad-free, but it will cost you.

4/17/24 2:42PM

Netflix, the company that popularized ad-free streaming, would like you to join its ad tier now. So would every other online video service, from Disney to Max, all of which now have ad tiers. That’s because they make more money per user advertising goods to you than just by collecting your monthly subscription fees. Some streamers are even highly subsidizing their ad tiers to get you there.

That’s why the prices for their ad tiers are starting to look a lot more attractive than ones not trying to hawk you a new car or stuffed-crust pizza.

The chart below shows how big the gap has gotten. The prices for ad-free tiers (the green dots on the right) have been growing much faster than that of the ad tiers (blue dots on the left).

For example, last July Netflix axed its $9.99 ad-free plan in the US and put in its place a $6.99 ad option and a $15.49 ad-free option. So you could either pay less and deal with ads (a deal!) or pay more for essentially the same thing you had before — a sly piece of psychological maneuvering to push people toward the ad tier.

Last summer The Hollywood Reporter cited data from Hub Research, saying more than half of people said they’d choose ad-supported over ad-free platforms if it saved them $4-$5 a month.

Netflix is relatively new to the ads game but wants more of it.

“Our top ads priority — you've heard us say before, I think you'll hear us say it again — is scale,” Netflix Co-CEO Gregory Peters said during last quarter’s earnings call. “That means making the ads plan more attractive.” Those attractions include better pricing, as well as adding higher resolution and content downloads. Netflix is even offering the ad tier for free to customers of partners like T-Mobile.

It seems to be working: 40% of Netflix signups in markets where it’s available were for ad tiers last quarter. In a research note this month, Morgan Stanley predicted the ad tier to make up a quarter of subscribers in those markets by the end of 2027.

The same playbook goes for other streamers. Last summer, Hulu raised the price of its ad-free tier 20% while leaving the ad tier unchanged. Hulu is now charging $10 dollars more per month — a whopping $17.99 — to access the service without ads.

Amazon has been perhaps the most heavy-handed. Earlier this year, Amazon automatically started serving ads to its Prime Video customers, who typically watch the service as part of their Amazon Prime retail subscription. If you want to stop seeing ads you have to upgrade plans and pay an additional $2.99 per month. Morgan Stanley estimates that Prime Video ads could generate $3.3 billion in revenue this year, a number it says will more than double in 2026.

If you hate ads, there’s more bad news. Analysts expect Netflix to raise its prices again this year and it’s likely ad-free tiers will deal with the brunt of it. We’ll find out more during Netflix’s earnings Thursday.

If you don’t mind ads, these changes are probably good news for you! You get to mostly keep doing what you’re doing without paying much more.

The other good news is for ad buyers. Ad-industry publication Digiday calls 2024 the “start of the ad-supported streaming war.” The heightened competition among ad-supported streaming companies could lead to lower ad prices and better ad products for them.

Tom Jones6/24/26

Prime Day is here again and Amazon’s subscription service has never been more popular

Well, it’s that time of year again: many have made their wish lists, people are scraping together the money they’ve saved to pick out a perfect gift, some are presumably leaving out refreshments for the weary delivery drivers and, more and more, drones.

It’s Amazon Prime Day — meaning that it’s the second day of the four-day promotional event that Amazon still calls Prime Day — of course, and it’s even come early this year, with the company bringing the period into late June from July, when it’s been traditionally held for the last five years.

The Prime Age

Alongside the eyes and endless clicks that the arbitrary stream of listicles on “The Best Prime Day Deals” that almost every media outlet pours into, Amazon will also be cheering the fact that there’s now more Prime users than ever before to devour the retailer and its sellers’ sometimes-contested “discounts.” Indeed, according to the latest annual estimates from Consumer Intelligence Research Partners (CIRP), there were just over 200 million American shoppers using Amazon’s massive subscription service at the end of 2025.

Max Knoblauch6/15/26

Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

Millie Giles6/11/26

JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

Max Knoblauch6/8/26

Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”