alt Hacker NewsAt some point, the market will no longer be able to bear premium price hikes, and they'll just shove in ads instead - exactly as happened with cable.
Replies
lukeschlather • today at 5:16 PM
HBO never had a tier with ads when it was on cable, it was simply expensive.
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maxerickson • today at 6:59 PM
My understanding is that they already make more money on the ad tiers.
(So the price increases are about finding the revenue maximizing price for the ad free tiers, not about overall profit)
marssaxman • today at 5:28 PM
...and piracy will once again become rampant!
There is a difference between a streaming platform and cable. Streaming platforms are on demand while cable is broadcast.
To have an ads/no ads option with cable, you need 2 distinct channels with different programming, as you need something fill what would be the ad breaks. With an on-demand platform, there is no fixed schedule, so you can insert ads at will without having to account for that.
So even if the market for no ads is small, it doesn't cost them much to provide that option, and they just have to price it above how much they get from ads to make a profit. Even the seldom used YouTube Premium is actually quite profitable for Google. Streaming platforms won't miss that opportunity.