Streamers Have Broken the Deal With Viewers

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When TV and movie streaming first launched there seemed to be a new, albeit largely unspoken, contract between provider and consumer – pay a somewhat premium price and get access to an ad-free catalogue of content in return. Inevitably, things have changed as time has gone on. The market has become highly fragmented. It was naive to think that wouldn’t happen. There was never going to be a replication of the Spotify/Apple Music setup, with users just needing one subscription to get everything.

Much has been written and said about the fragmentation of streaming – by me and many others. What I want to focus on more deeply is the introduction of adverts. The most recent example of this is Amazon Prime Video unceremoniously telling subscribers they are going to have to pay  £2.99/$2.99 per month more to not have ads from the end of this month. It is not entirely clear what this means for users like me who pay for an annual Prime subscription and like the content on Prime Video. I contacted Amazon to try and find out but had not received an answer at the time of writing.

Other streamers have introduced cheaper tiers with ads, but Amazon is turning them on by default and asking for extra to turn them off. It is essentially moving everyone onto the ad-supported tier, whether they like it or not. According to Bank of America analysis reported by Bloomberg News, this could add up to $5 billion to the Amazon coffers. A nice trip or two to space for Jeff Bezos.

I should say at this juncture I don’t object to adverts. Far from it. They are more than appropriate on commercial TV, podcasts, newsletters, YouTube videos and the like. I gladly run them myself, including in today’s newsletter! (Get in touch to discuss opportunities!) However, it does feel to me that the contract between streamers and consumers has been broken. Prices keep going up and there are adverts. Of the key streamers, Apple TV+ has not added adverts yet, apart from during live sport, but its price has crept up.

Obviously, implementation is key. On balance, a couple of pre and post-roll ads at either end of a show or movie are not a big deal. Many streamers already advertise their own content pre-roll. However, it would be better if that meant price rises were avoided. Putting ad breaks into the middle of shows is an annoying return to the past, a reintroduction of a reason why many were so keen to subscribe to streaming services in the first place. Ads in the middle of movies would be unthinkable. 

Again, this is not an anti-adverts thing. Context matters. Services that are cheaper/free and started out with ads are no problem. You know what you’re signing up for. Same with YouTube or linear TV. But I do resent a fundamental change to the model being imposed and being charged extra for the privilege of going along with it. Frankly, it feels exploitative. 

While there will be threats from users to unsubscribe, and some people will even see that through, ultimately the streamers know we like watching TV. They know that so long as they have stuff we want to watch, we are going to continue to pay up AND watch the ads. They have no incentive to restore the original deal.



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