Recently you may have noticed that streaming services have been pushing ad-supported plans and even services like Amazon are switching all their customers over to ad-supported plans unless they pay more.
So why are they pushing ads so hard? In short, streaming services make more money if you subscribe to ad-supported plans. According to a report from Emarketer, ad supported plans are typically more profitable.
Recently the demand that streaming services find a way to become profitable has grown. Many are turning to ads to help boost revenue. But not only ads on commercials breaks, but also ads on pause screens, home screens, and more.
With investors increasingly becoming unwilling to pour money into unprofitable streaming services, this has forced them to find ways to become profitable faster. Ads are how many streaming services think they will be able to become profitable quickly.
The question now is will that be true or will this strategy fall short before these companies run out of money.