[excalibur]

Hulu does offer an ad-free tier, it's like double the cost of the basic plan. I haven't sprung for it yet, but I'm sorely tempted.

I can see Netflix looking to a similar model in the future. What are they at now, $12.99? I can see the current base subscription going to $14.99, while simultaneously launching an ad-supported version priced around $7.99.

Edit: Netflix actually DOES offer a cheaper $8.99 plan currently. This one is restricted to one screen at a time, and does not offer content in HD. So if they stuck ads on it, maybe they could bring the price down to like $5.99.

[t0mas88]

YouTube 30 second preroll ads cost currently around $ 7 per 1000 views and it's decreasing. So to take Netflix from $ 14.99 to $ 7.99 per month they would have to show you around 500 minutes of ads every month. That's 33 of those 30 seconds ads every day, without skipping a day. While you still pay $ 7.99 per month as well. I don't expect consumers will accept that.

So the only way they can make an ad-supported Netflix work is to create some form of much more effective ad (which usually means taking more of your data) or attract a very specific high value audience (makes them too much of a niche player for their size)

[sib]

Premium video ads sell at much higher CPM than YouTube. Hulu makes more money from users on their "with-ads" tier than on the higher-priced "ad-free" tier.

[cwkoss]

I think a lot of people refuse to pay for an "ad-free" tier that still insists on occasionally showing ads, feels scummy.

[excalibur]

They could mess around with the amount of ad time per program and the plan price.

I think Hulu is showing at least 5 minutes of ads per 22 minute program, so watching two hours of programming would exceed the ad time you mentioned. This is reasonable for a single day, but a high bar for a daily average.

[gbronner]

Nahh... they'd just make the cheaper product obnoxiously time wasteful so most people upgrade. It doesn't have to stand on its own.

[MisterBastahrd]

I pay for the ad-free tier but I still get ads for their live streaming service (and for their DVR, every commercial break gets replaced with 3 minutes of non-fastforwardable commercial content), which is why I'm probably going to stop using their streaming service. I really only wanted it for sports channels anyway.

[bobwaycott]

I think this must be show-dependent. I, too, pay for the ad-free tier, and the most ad-like thing I've seen is a 2- or 3-second Family Guy is returning on <date> and a FOX logo interstitial at the start of streaming an episode of Family Guy. Can't recall seeing anything else across a number of shows.

[jdminhbg]

It seems to be network/show-dependent. The ad-free package removes all the ads that Hulu shows, but if Fox has ads of their own they're still in there. I usually get a single FX show promo in every Simpsons episode I watch.

[MisterBastahrd]

I have no idea. Sports events tend to be hours long, and every commercial break has these. You can technically skip a few minutes ahead, but then you miss part of the game.