For a long time, Netflix made money by charging people to watch their shows and movies without interruptions from ads. But in late 2022, they started offering a cheaper plan with ads.
Amazon did the same thing with its Prime Video service. This change is because both companies have seen slower growth in their subscriber numbers.
The reason they’re adding ads now is because advertising on videos is becoming more popular and can make a lot of money. This year, it’s expected to bring in almost $63 billion globally, up from $26.2 billion in 2020.
YouTube makes a big chunk of that money because it’s always had ads. Netflix and Amazon want a piece of that pie.
To keep growing, both companies are also looking outside the US for new customers. They’re making more shows and movies in places like Europe and India to attract more people to their services.
Even though they used to focus on getting people to pay for subscriptions, they’re now trying to appeal to those who don’t want to pay by offering free options with ads.
Overall, they’re trying to find a balance between making money from ads and keeping subscribers happy with good content.
