Given the major push towards ad-supported tiers we’ve seen from the largest streaming platforms over the last few years, you may have walked away with the distinct impression that they’d really love you to take on an ad-supported package. But, as streaming matures, that may not be the case, as Brandon Blake, our entertainment lawyer at Blake & Wang P.A., is here to break down.
A Return to Prime Time?
If you’ve been paying attention to the streaming environment of late, it might be starting to feel a lot like the heyday of broadcast. First, we saw the ads return. Then it was mid-programming advertising and lower-cost, ad-supported tiers. And now, live sports and simpler programming, like reality TV, is being increasingly used to both lure in subscribers and pad up slates that can no longer sustain the splashy big-budget productions that were once top of the streaming food chain.
However, the price tags associated with streaming look a lot different from the Pay TV era. And, currently, the price hikes keep coming.
The Advertising Irony
This also raises a rather ironic catch-22. Advertising has become increasingly important for streaming and is one of the major current revenue drivers for the streaming model. Not just through raw advertising dollars, but also through the lure of those cheaper ad-supported tiers.
However, advertising has never been a seminal part of a good user experience, and most platforms still want to offer a way for users to bypass ads.
Yet, as price increases widen the value gap between the two categories of tiers, and more and more households carry multiple subscriptions, ad-supported is becoming the go-to. And with enhanced targeting and new ad offerings, many streamers are seeing their ad tiers become a whole lot more lucrative than their non-ad offerings.
It looks like the Pay TV mechanism may have passed its heyday, but the same lure of ad-supported programming lives on after all.
Film and Television 