As Amazon becomes the latest platform to push an ad-supported tier, TV writers greet this retro model with frustration and, in some cases, disdain: “I thought 'Nine Perfect Strangers' with commercials was horrible,” says David E. Kelley of his Hulu show with breaks.
yea, its not like Netflix made $33.7 billion U.S. dollars, with $5.5 billion of pure profit in 2023 alone…
If ten million more people stream The Crown tomorrow using ad-free Netflix plans, where is the residual money for those ten million additional streams supposed to come from?
i… honestly don’t know what you mean? If 10 million people stream the crown tomorrow, every one of them is already paying for a membership, so i suggest you take the money from the monthly fee they already pay.
Maybe Netflix brings home only $5b of profit… poor poor billionaires.
That’s not profit, but income.
But in any case, this is still a problem, as if any show gets popular enough, Netflix could theoretically owe more in residuals than they’re making in monthly subscriptions. Ads are the only way to ensure that the people working on the projects can get paid what they’re owed when we watch the media they made.
Look I don’t like ads as much as the next guy, but when it comes to making revenue for people working on the shows and movies I watch, there are only two ways to guarantee that those workers get paid: if advertisers cover the residual fees with ads, as they’ve done for decades now, or through margins of either physical or digital media sales. I love physical media but I’ll happily watch ads on shows because it means that the people who made them are getting paid.
TL;DR for any of this to truly work and for the actors, writers, and others to get paid their due, the money needs to come from an income source that generates more revenue when more people consume to media; otherwise, the companies offering these services could theoretically run out of money to pay residual fees.
i agree that everone needs to get paid, but we could say the same thing about an ad supported model, until its 6 hours ads for every hour of show “but what if”.
In the end, they are making $5b of net profit (and $12.93b of gross profit), so their profit/liabilities is an extremely healthy 40%!). the increased profits isnt about paying people more, its about increasing their net profit for their shareholders.
I agree to a point. While you’re right that the profit/liabilities margin is healthy, and that driving people into ad-supported tiers by raising the cost of ad-free viewing is mostly to keep these companies from having to pay out of existing income streams in order to keep profits as high as possible (even if they’re still negative at the moment), I think it’s still worth considering that there is a potential for ad free viewing to cause a company to owe more in residuals than they make in subscription revenue if, for example, a ridiculous amount of people stream something for whatever reason.
(BTW when I’m referring to net income being “still negative” I’m talking about the streaming services, not the companies that own them)