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Comment by dcrazy | Hacker News Reader

Netflix’s ad-supported tier makes so much more money per user than their ad-free tier that they had to raise the price of the ad-free tier to make it competitive on ARPU.

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But those two tiers are not really competing with each other, are they? I'd wager that most people are fixed in one group: either they will never watch anything with ads (e.g. me), or they just don't care about seeing ads. The former group will never switch to the ad-supported tier -- they'll just cancel if the price gets too high -- so the only calculation is price vs. retention among that group. Similarly, the latter group will never pay extra for ad-free, so it's a completely different calculation. Why are the two prices in competition?

I guess I'm weird because I pay for Netflix/HBO for no ads, but I'm on the ad supported tier for Peacock and Hulu. I guess it's just what I'm used to (I don't expect to see ads on Netflix, but I do expect to see them on Hulu)

Is there a price point where you'd switch between the two tiers for those services? I mean, I guess if they were literally the same cost.

Good question. I think it's really just status quo. I got Peacock for free thru Xfinity and it was ad supported, but when I left Xfinity I just kept the same tier. Same with Hulu; my wife had ad Hulu before we got married and when we merged finances I had to reason to upgrade. But Netflix/HBO with ads just seems weird to me.

I'm on the ad-free tier for Peacock and have honestly considered downgrading because most of what I watch there is live sports, and they have natural breaks in play that the linear broadcast fills with ads, whereas Peacock on the ad-free tier fills with extremely irritating repeating elevator music. It's bad enough that I'd rather see the ads.

Wow that is really irritating! I used to get peacock for free with Xfinity until I fired them, but I still watched (nin-live) shows so I kept the cheapest tier. Interestingly enough, when I watch on my TV they forget to show me ads or something.

Side note: I discovered by accident last week that uBlock Origin eliminates ads on Amazon Prime Video too. We don't often watch that service on anything other than our "smart" TV, but was watching one episode on a laptop with firefox while travelling and realized afterwards the very brief black screens were where ads would have been.

>Side note: I discovered by accident last week that uBlock Origin eliminates ads on Amazon Prime Video too.

It works on Hulu too. You get a box at the beginning of the show saying "please turn off your ad blocker" but once you click OK it never comes up again.

And Tubi

Apparently it works so consistently and so well that this is the first I'm learning that Prime has ads. I'm surprised they went that route.

Spotify is doing this as well. If they can "downgrade" users from paid all-you-can-eat plans to cheaper plans that also serve ads they're overall way more lucrative.

> had to

And that’s why you can’t get a faster horse

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