Last week, Netflix officially launched its “Basic with Ads” tier in the U.S. and in a dozen global markets, marking an end of an era for the so-called “streaming wars.” Now, the key battle is no longer focused on subscriber growth via premium subscriptions, but rather maximizing audience reach – especially internationally – through more affordable tiers subsidized by advertising.
But not every Netflix subscriber is going to downgrade to the ad-supported tier. Yes, subscription fatigue is growing – especially when it comes to content streaming services – with a recent survey reporting that more than one third of users worldwide are likely to cancel a subscription in the next year. But, given the various restrictions Netflix has put on its ad-supported tier, including lack of HD video quality and limited access to certain licensed titles, most existing subscribers will likely stay on their current subscription plans.
But that doesn’t mean there is no way for the streamers to monetize the audiences that are paying their subscriptions to avoid ads. In recent months, Amazon, Netflix, and Apple have all started to explore buying more sports rights to double down on ad-supported sports content.