4 ms·

> TV money is absolutely going away -- the future of TV is commercial-free subscription VOD (like Netflix) No, the future of TV is like cable TV, but on the In

by jwebb99 10y ago

> TV money is absolutely going away -- the future of TV is commercial-free subscription VOD (like Netflix) No, the future of TV is like cable TV, but on the Internet (Subscription Fee + Ads)... like Hulu.

exelius 10y ago
Being on the Internet breaks the advertising model (CPMs are much, much lower online versus TV ads due to the sales channels they use). Moreover, the Internet has conditioned people to think "Subscription = No ads!" Hulu isn't the future of TV; Hulu is the future of TV as envisioned by a bunch of major TV networks. I think HBO and Netflix are closer to the future of TV than Hulu is.
- icebraining 10y ago
  Moreover, the Internet has conditioned people to think "Subscription = No ads!" Wasn't that the promise of the early cable TV? How long did that last?
  - dragonwriter 10y ago
    > Wasn't that the promise of the early cable TV? No, early cable TV was a way to provide signals from broadcast (and, thus, ad supported) channels to areas where, for geographic reasons, there was poor reception. (The CATV acronym frequently used for cable TV originated as an acronym for its earlier name, "Community Antenna Television" -- reflecting it as a model of consumers sharing an antenna to receive broadcast signal.) Premium, ad-free content, cable-specific programming didn't turn up until decades later. So, you've basically got it backward: instead of being something that originally promised subscription fees for no ads content but fell away from that, cable is something that initially offered subscription fees for access to ad-supported broadcast content but later evolved to include subscription-based (and pay-per-view) ad-free content available on top of the basic ad-supported content.
  - toomuchtodo 10y ago
    > 74% of Netflix subscribers would ditch the service over ads http://bgr.com/2016/06/22/netflix-price-hike-ads/ http://bgr.com/2016/06/22/netflix-price-hike-ads/
    - GFischer 10y ago
      That's not the most rigorous of samples (reddit users), I believe those results might be biased - I think commenters on sites such as Reddit or HN might be more likely to take this kind of actions. I'm not sure what Netflix's endgame is, but they're leaving a LOT of money on the table by going subscription-only.
- maxxxxx 10y ago
  I am sure people will get quickly conditioned to "subscription = fee + ads".
  - exelius 10y ago
    Not when "subscription = no ads" is an option. Which it will be, because a lot of consumers prefer not having ads over saving a dollar or two a month.
fossuser 10y ago
Even Hulu has an ad free version now for only a couple dollars more a month. I find it unlikely that anyone would choose the ad supported model when you can pay a little more to not have ads. Ads should only exist in free/no subscription fee content.
- manigandham 10y ago
  > I find it unlikely that anyone would choose the ad supported model when you can pay a little more to not have ads. Consumers are very sensitive to pricing, especially for entertainment. > Ads should only exist in free/no subscription fee content. Why? It's a spectrum, not binary.
  - AJ007 10y ago
    I don't know what Hulu's numbers look like, but what % of US consumers who will spend $7.99 a month on something won't pay $11.99 instead to avoid commercials? If the gap was between free and $11.99 then I would very strongly agree with the price sensitivity. Amazon and HBO are already basically forcing ads in front of the shows now though it remains self-promotional. There is a substantial amount of value that could be unlocked if TV ad budgets moved to Amazon and Netflix. Irregardless of current claims I wouldn't be surprised to see some form of sponsorship appear on Netflix if subscriber growth starts reaching its limits. Quite honestly strongly merchandised brands like Disney should be paying for video distribution rather than licensing it out.
  - fossuser 10y ago
    On some level I think it actually is binary. If I'm paying for content, but that content also has tons of ads I feel like the provider is double dipping. Charging me to access the content and making money from advertising. If the content is distributed for free (as over the air TV originally was) then I understand the advertising supported model. If I'm being charged for it then I think ads are not acceptable under any circumstance. Consumers are sensitive to pricing relative to free, but when you're charging for both I suspect most would pay extra for no advertising.
- jwebb99 10y ago
wincy 10y ago
I did not have a Hulu subscription until Hulu began offering an ad-free experience for a premium. HBO Now is also ad free. I'd be curious to see the percentage of users choosing to pay more to avoid ads as it makes the entire experience so much better. Do you think they'll phase out this feature, or continually ratchet up the fees? I suspect they realize there's a market of individuals who have no tolerance for ads and want to capture that market rather than lose them to bittorrent or just total cord-cutters who can take or leave television.
dragonwriter 10y ago
> No, the future of TV is like cable TV, but on the Internet (Subscription Fee + Ads)... like Hulu. No, the future of TV is like cable TV, but on the internet -- a mix of subscription + ads services, subscription ad-free services, and ad-free pay-per-item services. The difference is that, in the internet form, these services are more likely to be separately purchased rather than bundled on top of each other.

by jwebb99 10y ago

exelius 10y ago

Being on the Internet breaks the advertising model (CPMs are much, much lower online versus TV ads due to the sales channels they use). Moreover, the Internet has conditioned people to think "Subscription = No ads!" Hulu isn't the future of TV; Hulu is the future of TV as envisioned by a bunch of major TV networks. I think HBO and Netflix are closer to the future of TV than Hulu is.

icebraining 10y ago
Moreover, the Internet has conditioned people to think "Subscription = No ads!" Wasn't that the promise of the early cable TV? How long did that last?
- dragonwriter 10y ago
  > Wasn't that the promise of the early cable TV? No, early cable TV was a way to provide signals from broadcast (and, thus, ad supported) channels to areas where, for geographic reasons, there was poor reception. (The CATV acronym frequently used for cable TV originated as an acronym for its earlier name, "Community Antenna Television" -- reflecting it as a model of consumers sharing an antenna to receive broadcast signal.) Premium, ad-free content, cable-specific programming didn't turn up until decades later. So, you've basically got it backward: instead of being something that originally promised subscription fees for no ads content but fell away from that, cable is something that initially offered subscription fees for access to ad-supported broadcast content but later evolved to include subscription-based (and pay-per-view) ad-free content available on top of the basic ad-supported content.
- toomuchtodo 10y ago
  > 74% of Netflix subscribers would ditch the service over ads http://bgr.com/2016/06/22/netflix-price-hike-ads/ http://bgr.com/2016/06/22/netflix-price-hike-ads/
  - GFischer 10y ago
    That's not the most rigorous of samples (reddit users), I believe those results might be biased - I think commenters on sites such as Reddit or HN might be more likely to take this kind of actions. I'm not sure what Netflix's endgame is, but they're leaving a LOT of money on the table by going subscription-only.
maxxxxx 10y ago
I am sure people will get quickly conditioned to "subscription = fee + ads".
- exelius 10y ago
  Not when "subscription = no ads" is an option. Which it will be, because a lot of consumers prefer not having ads over saving a dollar or two a month.

fossuser 10y ago

Even Hulu has an ad free version now for only a couple dollars more a month. I find it unlikely that anyone would choose the ad supported model when you can pay a little more to not have ads. Ads should only exist in free/no subscription fee content.

manigandham 10y ago
> I find it unlikely that anyone would choose the ad supported model when you can pay a little more to not have ads. Consumers are very sensitive to pricing, especially for entertainment. > Ads should only exist in free/no subscription fee content. Why? It's a spectrum, not binary.
- AJ007 10y ago
  I don't know what Hulu's numbers look like, but what % of US consumers who will spend $7.99 a month on something won't pay $11.99 instead to avoid commercials? If the gap was between free and $11.99 then I would very strongly agree with the price sensitivity. Amazon and HBO are already basically forcing ads in front of the shows now though it remains self-promotional. There is a substantial amount of value that could be unlocked if TV ad budgets moved to Amazon and Netflix. Irregardless of current claims I wouldn't be surprised to see some form of sponsorship appear on Netflix if subscriber growth starts reaching its limits. Quite honestly strongly merchandised brands like Disney should be paying for video distribution rather than licensing it out.
- fossuser 10y ago
  On some level I think it actually is binary. If I'm paying for content, but that content also has tons of ads I feel like the provider is double dipping. Charging me to access the content and making money from advertising. If the content is distributed for free (as over the air TV originally was) then I understand the advertising supported model. If I'm being charged for it then I think ads are not acceptable under any circumstance. Consumers are sensitive to pricing relative to free, but when you're charging for both I suspect most would pay extra for no advertising.
jwebb99 10y ago

wincy 10y ago

I did not have a Hulu subscription until Hulu began offering an ad-free experience for a premium. HBO Now is also ad free. I'd be curious to see the percentage of users choosing to pay more to avoid ads as it makes the entire experience so much better. Do you think they'll phase out this feature, or continually ratchet up the fees? I suspect they realize there's a market of individuals who have no tolerance for ads and want to capture that market rather than lose them to bittorrent or just total cord-cutters who can take or leave television.

dragonwriter 10y ago

> No, the future of TV is like cable TV, but on the Internet (Subscription Fee + Ads)... like Hulu. No, the future of TV is like cable TV, but on the internet -- a mix of subscription + ads services, subscription ad-free services, and ad-free pay-per-item services. The difference is that, in the internet form, these services are more likely to be separately purchased rather than bundled on top of each other.