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Streaming was once a reprieve from cable. Not only could you watch whatever you wanted at any given time, but you didnโt have to sit through five-minute-long commercial breaks. And the best part was the price: Netflix, for example, cost just $7.99 / month when it launched its standalone streaming service in 2010. Amazonโs Prime Video was the same, offering ad-free streaming as a perk with its Prime membership. Hulu was an outlier at the time, but thatโs because it allowed you to stream ad-supported TV shows and movies for free. It later added a $7.99 / month Hulu Plus subscription, with limited advertising.
But the commercial-free streaming model was so appealing that when companies launched rival streaming services, most made them ad-free by default. Disney Plus cost $6.99 / month when it launched in 2019, followed by the $4.99 / month subscription to Apple TV, and the launch of HBO Maxโs $14.99 / month streaming service. (There were some exceptions, of course, like Paramount Plus, which launched with ads for $4.99 / month, and NBCUniversalโs Peacock, which offered some titles for free alongside a $4.99 / month ad-supported tier with access to all of its shows and movies.)
As the streaming industry matured and viewers settled into the services of their choice, many executives soon realized that they couldnโt make money just by adding new subscribers in an already saturated market. Moreover, Netflix lost subscribers for the first time in more than a decade in 2022, while the streaming businesses run by its competitors remained unprofitable. Streamers needed a solution โ especially so they could keep spending the billions required to fill their libraries with movies and TV shows.
In between steady waves of