It turns out that TV worked pretty well under its old model. According to a new report from Business Insider, Apple TV+ may be the latest streaming service that’s set to introduce an ad-supported tier and charge those who don’t stream with ads a premium fee to access their great shows and movies.
At this point, the report is still speculation, but Apple has made several recent hires in the advertising space that seem to suggest the direction they’re planning to take. The company recently hired former NBCUniversal ad executive Joseph Cady to serve as executive vice president of advanced advertising and partnerships, a move that comes following the company’s hiring of another former NBCUniversal executive, Jason Frum, who joined Apple’s video ad sales team.
The company also hired former Peacock executive Chandler Taylor as a video ads account manager, and Jacqueline Bleazey, who was a former senior director of sponsorships and ad sales at FanDuel, has also joined Apple’s advertising team.
If Apple does introduce ads on Apple TV+, it’s unclear what that might mean for the service’s overall pricing model. Right now, the service offers only a single, ad-free tier that costs $9.99/month.
Ads are coming to every streaming platform
Although users may have turned to streaming in part because the services didn’t rely on advertising the same way that linear cable does, it turns out that the subscription-only model may not be enough to pay for all the content that streamers are churning out.
Amazon Prime Video was the last streaming service to introduce an ad-supported tier, simply introducing them in January to all customers paying their $8.99/month subscription fee. The company charges $2.99/month extra to users who don’t want to see ads on their content. The introduction of ads on Prime Video led to an immediate backlash and even sparked a class-action lawsuit from users.
Before Prime Video made the switch, Netflix introduced an ad-supported tier at a discount, offering users a $6.99/month subscription fee in exchange for seeing ads with content. Netflix made that move in 2022 and has not seen the same level of backlash, likely in part because it didn’t introduce the ads to all users automatically. Max is in the same boat, offering users a cheaper subscription tier that includes some ads.
All in all, then, it seems like the streamers are realizing that the old TV model was the right one. Ad support is the best way to ensure that the shows you make turn a profit, which, of course, is what allows you to keep making new shows and movies.
As these ad-supported tiers become more common, it seems like users might be warming up at least somewhat to the prospect of seeing ads with their content, especially if it allows them to save a few bucks. If Apple TV+ does go that route, we’ll have to see how it ultimately plays out.
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