by fnordpiglet 9 hours ago
I’d note they’re not mutually exclusive revenue streams and both add meaningfully to their value. I think the reality is they peaked the first one and growth is in the second one. Subscriptions that are sticky however are much more valuable individually than an advertising tier user. But if you can cater to both and not downgrade subscriptions to ads tier you win in two parallel markets via the same platform. This is not a bad business strategy. But they need to not lose the subscriptions and their reason for being in the quest for growth or they’ll see nominal growth with decline in value.
> they need to not lose the subscriptions
note: I hate ads so I'm not trying to manifest this, but can you explain why you're so sure of this?
To me, it seems like they "should" (for greed reasons, I mean, not for my happiness) hike the prices of subscriptions aggressively while keeping the ad-tier attractively-priced, moving as many people as possible over. This increases ad revenue and allows more YoY growth if their ML can manipulate you into more watch hours in 2027 than you do in 2026.
Sure, some people like me will probably drop Netflix before they'll pay $35 a month or endure ads. But the current delta is only $10. I suspect they can make $10 a head in ad revenue in a year -- and if they can make $15, they would break even if they lost 3 ad-free subscribers but gained 2 back onto the ad tier. Anything better than those numbers would be a net gain.
> while keeping the ad-tier attractively-priced
Wait, the ad tier isn't free? Good god....