With Netflix new ad-free standard plan at $20, streaming's tipping point into old TV is getting closer

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Streaming companies are discovering that their most valuable customers may not be the ones paying the most. Instead, it's increasingly the viewers who watch the most.

After years of resisting advertising, Netflix is now leaning heavily into that model, rapidly building out its advertising business alongside subscriptions. "We're making good progress, and the opportunity ahead of us is massive," Netflix co-CEO Greg Peters said after the company's latest earnings report.

Disney's Hulu has long combined subscription and advertising revenue, and Paramount, Warner Bros. Discovery and Comcast have pushed similar strategies across their streaming platforms.

"Building out our ads business continues to be a major monetization priority. Our advertising revenue remains on track to reach $3 billion in 2026, up 2x year-over-year," said Netflix spokesperson Adrian Zamora.

That's because streaming platforms can combine scale with detailed data on viewing behavior, allowing advertisers to value audiences based on actual engagement rather than broad demographics, he said.

The model is also being driven by consumers who are increasingly resistant to higher subscription costs.

Ad-supported plans are not just a cheaper alternative. Now, they are the primary way new users enter streaming platforms, said Mary Gabrielyan, chief strategy officer at media and marketing technology company AI digital.