More Bucks, More Ads: How Streaming Backed Itself into a Corner in 2024?

Want to catch the latest NFL game? Then head over to Peacock. Oh, wait! They’re now streaming it over Prime Video. Or maybe you wish to dive into some Spider-Man action. It’s all there on Disney+ except the SpiderVerse movies that are available on Apple TV and Netflix. What are you worrying about, ask your friend’s Netflix password.

Ahh, you’re not a part of their household. Maybe get the ad-supported plan and cancel it after a month. Wait? Did you forget to cancel the subscription? Just prepare a spreadsheet of your subscriptions like the rest of us. This pretty much sums up the state of streaming in 2024.

It Didn’t Use to be That Bad

We live in a time when anything you want to watch is available on demand. That’s all thanks to streaming, but its atmosphere in 2024 has turned this entertainment revolution into a snake that’s eating its own tail. It’s no more a question about what to watch, but where you watch it. As more and more services with their confusing tier of plans keep popping up, spearheaded by studio executives.

But things didn’t use to be like this. In 2008, when Netflix had just started exploring the streaming space, consumers were frustrated with paying an average of $60 per month for cable as per New York Times. At the time, you can stream all the content you could ask for just $8.99. So for a fraction of the price, you got an à la carte experience. It just worked as a tech product should, and in some cases… even better.

The business soon became a production house, creating its originals and soon, winning an Academy Award in 2014. That’s when other studios started taking streaming seriously. They pulled their shows off of Netflix and greenlit originals. Billions were being burned so they could build their own services. And before you know it, we had a growing pile of streaming services from almost every Hollywood studio. HBO Max (now Max), Peacock, and Paramount+ are to name a few.

The Price of Bingeing

The once flawless Utopia that cord-cutters dreamed of is finally here, with over 1.8 Billion subscribers worldwide. But now it has started to show its true colors. Services that offer unlimited streaming at dirt-cheap prices don’t have to attract consumers anymore. They already have them hooked. According to Forbes, 99% of all U.S. Households now have at least one or more subscriptions.

Netflix enjoys the largest user base of 282 million viewers, with Amazon Prime and Disney+ close behind. But as you can tell, these platforms are reaching a ceiling point. So now assume you are an executive at one of these platforms, and your direct-to-consumer growth has slowed down. How do you make up for the cost of running the service, while also having to pay back the Billions in debt you took to fund a platform’s worth of content?

The answer is twofold. Either increase the subscription cost or introduce ads. Why not both? While the cost of subscriptions has steadily inclined, recently it has jumped significantly. Practically any subscription you can name off, however old, has increased its price since launch. Here’s a table to give you a better idea of what their original plan cost, and how much you have to pay now for the same benefits.

But you can only raise prices so much before you lose people’s goodwill. That is why streamers introduced a new ad-supported base plan. Hulu has had an ad-included tier for the longest time that I can recall, and others are following suit. This offers the service’s content library at the lowest possible price, with the downside of having to watch ads sporadically.

The tech that once introduced the idea of removing the annoyances of cable, has come full circle and is now serving users those problems themselves. Netflix introduced its ad tier in November 2022; later that year, Disney+ joined in. Amazon Prime Video was late to the party, but in January of this year, they also gave in by introducing a new ad-supported base plan. Many of us subscribe to multiple services, and the ever-increasing price of subscriptions prompted us to switch to ad-supported plans.

According to AdWeek, more than 70 Million Netflix subscribers come from the ad tier, and the number is close to 50% for Disney+, while Amazon takes the cake with over 80% of its users going with the cheaper ads plan. Don’t get the wrong idea, people aren’t enjoying ads, but they don’t have any other option to go with as the price of ad-free tiers keeps skyrocketing. As you can tell from this graph by Statista, the ad-free tiers of the top five platforms now cost over $15.

However, that isn’t the end of the tale. This year, we saw platforms hiking fees for their ad-based tiers while introducing more ads simultaneously. Disney+ ad-supported plan went from $7.99 to $9.99 all in the name of serving the best quality content. This trend will continue next year as the competition for your attention grows further. Beyond increasing prices, and serving ads, the streaming industry in 2024 has found another way to maximize its financials.

The End of Streaming Freebies

I mentioned above that streamers are close to hitting a ceiling of users. However, Netflix soon understood that there is a hidden population who also use their services but aren’t paying for them. These are your friends and family members whom you share your account password with. They were already hooked to the platform, the hurdle was how to make them pay for a subscription.

That’s why Netflix took the initiative to crack down on password sharing in 2023. It booted off any freeloaders off of accounts that didn’t match their location. So if you were using your friend’s or colleague’s Netflix account outside their home, you could no longer access it. During my research, I stumbled upon this tweet from Netflix where they encouraged password sharing at one time.

Love is sharing a password.

— Netflix (@netflix) March 10, 2017

It aged quite poorly, as the company was now using bottom-of-the-barrel tactics to increase its subscriber base. While it raised many uproars, at the end of it all, Netflix gained a sizeable 9 Million users as per this CNN report. This move made enough of a dent that other platforms took notes. Soon, streaming services like Disney+ and Hulu ventured into the same restrictions in June 2024. Max will follow suit in 2025 followed by a price increase.

Live Sports Takes Center Stage

The only draw cable services have in 2024 is live sports events, but streaming will gulp that segment as well. That’s because it brings in record viewers, and advertisers are willing to pay big money to show their ads in between live sports matches. Services like Hulu, Peacock, and ESPN+ have already seen good results from hosting live events. Amazon’s Thursday Night Football had an average of 13.61 million viewers, topping many streaming records, according to Front Office Sports.

But as is the case with other content, there is a tug of war to get exclusive rights to broadcast these matches. Some services have access to only certain channels, like Hulu’s ESPN has BTN, CBS Sports Network, ESPN, FS1, FS2, Golf Channel, and NBC Sports Network. However, if you want to watch IndyCar and WWE, then you’ll need to subscribe to Peacock.

If you want to enjoy the luxury of almost all channels at your disposal, then you can go with YouTube TV. It has a large catalog of sports media and also lets you record them, similar to DVRs. However, it is quite expensive, and recently received a price increase, bringing its monthly cost to $82.99. So you’re stuck with the same dilemma again of wondering where to watch the content.

We Have Come Full Circle

All the problems I have discussed above added to the confusion of managing multiple streaming services led the industry to join forces and come up with bundles. These allow you to get your favorite subscriptions at an affordable price. Somewhat softens the blow of the rising subscription prices, but doesn’t solve the inherent issue with streaming. However, streaming in 2024 isn’t the wonder tech alternative to cable as it was once thought to be.

We have come full circle, facing more or less the same problems with streaming as our folks did back in 2008 with cable TV. The overbearing cost, the notion of having no other alternative, and the frustrations feel like déjà vu. It’s like a cursed technological prophecy echoed by network and studio executives.

Things are likely to get worse in 2025 with more ad tiers tagged with high prices and password-sharing crackdowns to come. And I know for a fact that cable isn’t making a comeback anytime soon. So buckle up buttercup for the next season of “How I Lost My Mind and Money to Streaming“, coming to your screen next year.