Cheap with ads is more profitable than expensive without ads

Just a few days ago, Netflix announced that it completely eliminated The cheapest plan with ads, and is putting an uncomfortable but very profitable truth on the table: it compensates to lose the cheapest plans and without advertising and that the gentle moves to less friendly but more beneficial options for the platform. This change represents a fundamental transformation in streaming consumption, witnessing the triumphal return of a model that many believed obsolete: paying to see ads.

There is no plan. Without issuing any media, the platform eliminated On July 30 the basic plan without ads. The subscription of 9.99 euros was so far the cheapest option to see content without advertising, but disappears: Users who paid for him will have to move to another. He did not admit several simultaneous devices, either extra subscribers, or downloads, or broadcast to Chromecast and the resolution was HD (720p). Netflix remains, therefore, with only three plans:

• Standard with ads (6.99 euros, ads, FullHD and limited catalog)
• Standard (13.99 euros, without advertisements, FullHD and the entire catalog)
• Premium (19.99 euros, without ads, 4K and the entire catalog).

Netflix is doing well. This step of Return to the exit box And make us pay again to see ads may seem counterintuitive, but it is renting: the platform announced in May that had reached 94 million users of plans with advertisements, a remarkable increase with respect to the 70 million in November 2023. In this way, the initial aspiration of the digital ecosystem disappears, which bet on an aspirational model where the premium price was justified by the absence of ads, thus distancing itself from traditional television. The times change and the spectators demand, given the excess offer (and the general recession), cheap offers. Even with ads.

It has trap. Because what is clear is that it is not about people wanting to see ads because they like them: they have no choice. The difference between the cheap and the next in the price staircase, already without ads, is almost double. Not all spectators can afford that leap. Therefore, what began as an alternative option for price -sensitive users has become an important growth engine for the industry.

Compensate ups. Users of streaming They have been seeing how prices go up without stopping. Between 2020 and 2024, users saw how their monthly subscriptions increased between 30% and 50% on most platforms. Netflix passed From € 7.99 to € 12.99 in its standard plan and Disney+ its price rose up to 17%. It was unsustainable to continue with the increases, so now they arrive otherwise, camouflating “descents” with advertising, which are also economically more beneficial for platforms: advertising income exceeds the income lost due to price reduction.

Ultra-Economy with advertising. Ads plans are no longer a secondary option or a “minor evil”, but a business pillar: now we accept advertising cuts as part of the price of accessibility. We contemplate a segmentation of the pill, which is divided into those that are willing to pay between 15 and 20 euros per month for an experience without interruptions and on the other, 70-80% of users They see the platforms with ads paying between 6 and 8 euros per month. This division does not catch us from new ones: it is a replica that we already saw in the nineties between those who paid on Canal+ and the first satellite teles and those who continued watching television in traditional open.

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