But what if I want a faster horse?

> "Shoving content into the faces of an indiscriminating userbase" maximizes eyeball time which maximizes ad dollars

I mean that's not really the case for paid services without ads like Netflix. They lose money the more you watch. Ideally you'd continue to pay for the subscription but never watch anything.

The marginal cost to serve you more videos is real, but it’s negligible compared to the fixed costs or cost of people not re-subscribing. So I assume that people at Netflix were optimizing for usage/engagement just like the ad driven services as a proxy for subscribe rate.

Ads are embedded into the media Netflix sells. See almost any car chase scene, either wholly unnecessary or unnecessarily long to advertise the car brand, many times with the actors’ speaking lines solely to advertise the car.

Even critically acclaimed shows like Slow Horses from a supposedly prestige media seller like Apple has scenes where you watch actors put on AirPods Max headphones (obviously with no relevance to the plot).

More accurate is “streaming without discrete ad breaks.”

I wonder how much the workforce plays into it.

If you have a bunch of people who work at companies that are trying to maximize eyeballs then they shuffle around to different companies, are they going to adopt the goals of the new company? Or is their existing perspective and skills going to shape the new company?

I imagine it's a bit of both. Given how big Google and Meta are and how much talent circulates among big tech companies, this might cause companies to lean a bit more heavily into the attention economy than they might otherwise need to.

Also, attention is just easier to measure than satisfaction. Makes it easier to fall down that path.

> Ideally you'd continue to pay for the subscription but never watch anything.

I think that’s Netflix’s actual goal: deliver nothing anyone wants to watch, but keep on promising the possibility of something one might want to watch in the future.

Which reminds me, we really need to cancel our subscriptions.

Netflix’s ad-supported tier makes so much more money per user than their ad-free tier that they had to raise the price of the ad-free tier to make it competitive on ARPU.

> Which reminds me, we really need to cancel our subscriptions.

A subscription service to cancel and renew your subscriptions. And stretch goal: annually renegotiate your utility bill so it doesn't 4-10X in cost each winter (for those that live in states that can do that).

> Also, attention is just easier to measure than satisfaction

This is a big part of it. Measuring how long someone stares at the screen is easy. It is in many cases a reasonable proxy for satisfaction - provided you mostly only care about the user as a source of revenue.

The social medias have demonstrated fairly concretely that it's a poor proxy if you care about the user's wellbeing. But they already got their bag, so they are hardly incentivised to fix that now.

But those two tiers are not really competing with each other, are they? I'd wager that most people are fixed in one group: either they will never watch anything with ads (e.g. me), or they just don't care about seeing ads. The former group will never switch to the ad-supported tier -- they'll just cancel if the price gets too high -- so the only calculation is price vs. retention among that group. Similarly, the latter group will never pay extra for ad-free, so it's a completely different calculation. Why are the two prices in competition?

That's pretty much Rocket Money

https://www.rocketmoney.com/

> More accurate is “streaming without discrete ad breaks.”

Yes, or as people call it: "ad-free". We all know what is meant by that phrase, being pedantic about "well actually there are ads regardless" doesn't make communication clearer.

I guess I'm weird because I pay for Netflix/HBO for no ads, but I'm on the ad supported tier for Peacock and Hulu. I guess it's just what I'm used to (I don't expect to see ads on Netflix, but I do expect to see them on Hulu)

We immediately cancel our subscription as soon as we subscribe for services like Netflix, Disney+ etc, where you keep the service for the month. It's thankfully really easy to susbcribe and unsubscribe these days, so doing it this way means we never unknowingly renew. Must have saved us hundreds of pounds by now.

Is there a price point where you'd switch between the two tiers for those services? I mean, I guess if they were literally the same cost.

>Ideally you'd continue to pay for the subscription but never watch anything.

There's a good planet money episode about the economy of gyms. Many really want members, not users. But members who never used would (eventually) cancel. So some had massage chairs in reception or free pizza slice tuesdays to keep the people who rarely came to work out feeling like they were still using the gym, forgetting it was just for a slice of pizza...

If there's nothing on netflix people will cancel netflix. So you want them to watch a few exclusive shows a year so they feel like they got their money's worth, while not actually costing netflix much.

What would you call actually ad-free broadcasts then?

The point is to bring the knowledge to people that the advertising is incorporated into the product. Lots of people don’t know the extra long car chase scene isn’t due to the director’s artistic preference, but rather economic preference, at the viewer’s expense.

There is a clear conflict of interest that can only be addressed by buyers being knowledgeable.

Side note: I discovered by accident last week that uBlock Origin eliminates ads on Amazon Prime Video too. We don't often watch that service on anything other than our "smart" TV, but was watching one episode on a laptop with firefox while travelling and realized afterwards the very brief black screens were where ads would have been.

Propaganda?

I can’t believe I’m saying this, but Netflix would probably be better if it learned a few lessons from gyms.

I have to go wash my mouth out now. Brb.

Some of these companies are trying to go for status now as well. They’re trying to strengthen their brands by picking up epic storylines and making them into the show everyone is watching. Only Netflix is chickenshit and they haven’t figured out that nobody watches the first season of a Netflix show until the second is announced because they know Netflix cancels shows all the fucking time. Which means Netflix cancels more shows because the numbers are terrible.

What they should be doing is test audiences. If those people hate it, then yes cancel. And be patient with everything else.

This is an important point. Readers should remember that what's obvious to them is not necessarily something "everyone knows" until it's pointed out. Personally I will say that when I first starting consuming movies at around age 20 I was not conscious of this dynamic, until I read about product placement in movies and then suddenly I started noticing it. Especially when a car chase scene goes into slow motion at just the moment that the camera gets a closeup of the tires and you can read the brand name...

There were people who only had HBO subscriptions to watch the new season of Westworld. Given they merged with Cinemax I’m not sure if that worked out for them. But there were also Apple+ subscriptions just to watch Ted Lasso. And I begrudgingly got Prime to watch the Expanse.

But when I bought the full seasons it was from Apple. I’m sure Bezos still ended up with most of that money but at least some of it went to Apple instead.

I don't really care for these type of ads as I see them everyday. They're already plastered on products I use. I would be grateful if ads on website were that static.

Does it actually work?

>Only Netflix is chickenshit and they haven’t figured out that nobody watches the first season of a Netflix show until the second is announced because they know Netflix cancels shows all the fucking time.

What's funny is that HBO is worse about that, but everyone watches the new HBO shows because they are big budget and look really appealing.

Netflix is also really bad about taking way too long to make additional seasons even if they announce them it's still forever before they come out.

This is the correct answer.

The more you watch, the less likely you are to unsubscribe.

If you haven't watched a streamer in a couple of months, that's the first thing you'll cancel when you glance at your credit card statement.

>Side note: I discovered by accident last week that uBlock Origin eliminates ads on Amazon Prime Video too.

It works on Hulu too. You get a box at the beginning of the show saying "please turn off your ad blocker" but once you click OK it never comes up again.

>Ads are embedded into the media Netflix sells.

That money goes to the people who made the film though, which in some cases actually is Netflix but not usually.

In a limited sense, yes.

But in spirit, you would probably only describe it as truly "working" (in the sense of accomplishing its claimed purpose) if as soon as it ran out of things to suggest cancelling, it suggested cancelling itself. Which it doesn't. So no.

Same as a dating site/app — a dating system truly designed in spirit to accomplish its claimed purpose, would seek to minimize the time anyone spends using the app before uninstalling it. And no such site/app exists. (Although it could — as this is basically the business model of a professional matchmaker, where you pay a large lump sum up-front and then they're beholden to do unbounded work to find you a happy relationship. So they seek to minimize how much of their time you spend, by finding you that happy relationship ASAP.)

Same here. I never subscribed to Netflix or Disney+ for the intended purpose of continually paying for it in perpetuity - it was always to watch the one show I want (in <1mo) and then immediately kill it.

How did you arrive at this proposal? Is the Mona Lisa propaganda because she isn't holding a branded flask with snake oil?

This doesn't really mesh with SaaS economics, or in this case how Netflix spends billions on producing their own content. A set of subscribers that don't use the service is locally maximized but has a lower lifetime total value. It is much easier to model & optimize your LTV with given costs (ex: assume the user watches 24/7) and then figure out "how do I make a user watch Netflix 24 hours a day?" than it is to solve "how do I grow my constantly churning user base?". Keeping customers is much less expensive than winning new ones.

This is the correct mental model. Minor COGS increase < Churn.

Spotify is doing this as well. If they can "downgrade" users from paid all-you-can-eat plans to cheaper plans that also serve ads they're overall way more lucrative.

>> but everyone watches the new HBO shows because they are big budget and look really appealing.

This doesn't feel as true anymore. There's still the odd HBO blockbuster but they're producing a lot more garbage as they search for the next hit. And they're not immune to the Marvel approach of strip mining a profitable franchise well past there being any gold left.

product placement is the very foundation of TV, it's just a little more subtle now. Originally shows were brought to you by XYZ and had an intermission to advertise their products. Radio did this as well.

Netflix is big and surely not monolithic so there may indeed be some people or even departments that think that way, but the content production is not thinking that way. They genuinely want to create amazing content that is compelling. There is also the very real need to have their own content as well now that the networks are selling streaming services themselves and damn near everything is now exclusive to whatever streaming service

I wouldn’t say they are hardly incentivized now. They were never incentivized.

What company cares about a users well being? The only companies that might care are ones where the population growth rate of humanity is the bottleneck on their new user acquisition and those companies are slowly morphing into sovereign nations already

> had to

And that’s why you can’t get a faster horse

Netflix could probably get enough goodwill by just automatically not charging people who didn't use their service at all as to be worth it. No hassle, we just keep rolling your subscription over until you watch something again (of course they make interest in the month you paid but didn't use services - that $0.05 should pay for the email and other infrastructure costs needed for a customer that doesn't even use the service). The real benefit of this is when someone does watch something there is no hassle - they are already subscribed and so they don't even think about should the re subscribe.

Of course with their ad supported tier they probably don't agree.

The professional matchmaker angle as a contrast is fascinating. The subscription model not only removes the incentive to provide quality quickly -- it reverses it. Doing a worse job is encouraged if you can leverage that to convince people that the future (which is only available by continuing your subscription) is worth waiting for. It's also more attractive because it has smaller up-front costs for the consumer.

It would be an interesting world if we outlawed auto-renewal for services that you need to actively use in order to get any value from them. When you're paying for Netflix, you aren't paying to watch movies, you're paying for /access/ to movies you can watch. The flip side is that the maximum potential service quality would decrease if revenue decreases -- which is also why ad-supported services prevail. If all players are subject to the same rules, that would either end up as a decrease in licensing costs or a focus on quality content over quantity. If they aren't producing exclusive content, they are beholden to the quality of the market. Either way, that should encourage quality content to be made over saturating the market with content.

Unfortunately, pipe dreams will remain pipe dreams.

I used to own a part of the Facebook homepage and maximizing its metrics was my job.

They told us they cared about wellbeing. I made a feature that demonstrably improved wellbeing, and we had lots of data and surveys etc to prove it.

But it decreased watch-time on shortform (what we used to call TikTok style) videos so the Director made me delete it. That started my disillusionment process that eventually made me quit.

Money is the only thing that matters to them.

While it initially makes a reasonable proxy you end up polluting the measurements gradually by engineering for maximum screen time. The Artificialy created screentime is increasingly unrelated to satisfaction and ultimately not at all.

Take how Google sorts results by popularity while it is also the main source of "popularity".

The word means something different now.

I'm on the ad-free tier for Peacock and have honestly considered downgrading because most of what I watch there is live sports, and they have natural breaks in play that the linear broadcast fills with ads, whereas Peacock on the ad-free tier fills with extremely irritating repeating elevator music. It's bad enough that I'd rather see the ads.

That is not product placement, per my working definition. Product placement is inserting the advertising into the art, where it is not clearly labeled or discernible as advertising.

On the TV show White Collar, the main character is never, shown driving a car, or talking about them, or having any interest in cars whatsoever. He walks around New York City, or is driven in a government employee's car. Yet, in one of the later seasons, he compliments on specific features of a car he is being driven, and has a dialogue about it with another character.

Extremely jarring for anyone paying attention, and obviously advertising. Product placement is sacrificing some portion of the art in exchange for money (or products/services which otherwise reduces production cost).

I think they already remind you after a year of inactivity, and automatically cancel your plan after 2 years of inactivity.

But they're a business, so obviously they want you to use it and pay for it.

Not directly, the there is a strong correlation between use of the product and retention. Ideally yes users that pay but don't use are the best, but those are rare. The cost of delivering the service on an incremental basis is also low. So all in all, they want users to be using the product as much as possible.

> So you want them to watch a few exclusive shows a year so they feel like they got their money's worth, while not actually costing netflix much.

No, that's not what the strategy is and they're quite open about it - the strategy is to maximize user consumption for every user, because that keeps them subscribed. I think a lot of people think that they use sophisticated analytics and machine learning etc to decide what to greenlight, but they don't. They use the judgment (and politics, and egos) of Hollywood studio executives (and often the same Hollywood execs that a few years ago were employed in "legacy" media). Although I will grant that they've been innovative in producing/distributing international content, this is really just globalization and labor arbitrage (it is cheaper produce content not in Hollywood, that's not news - they just spend the extra $$$ localizing international content to different global target distribution markets but again, this flow has happened forever, it's just typically been Hollywood -> localization -> foreign market rather than foreign production -> localization -> Anglophone market).

Where analytics and ML does come into play is deciding which things out of their enormous catalogue they push to individual users at any one time - that process is highly reactive, individualized, dynamic - that's why strange and seemingly random media become big hits on Netflix while being largely ignored by the commentariat, and vice versa, why series with dedicated fanbases don't get renewed (the analytics tell you that, despite the apparent success, further investment will not improve user engagement with the platform by enough to be worth the spend).

>Netflix could probably get enough goodwill by just automatically not charging people who didn't use their service at all as to be worth it.

Is there a circumstance that could cause their stock price to drop to $0 more quickly?

Maybe it's confirmation bias, in that I'm interested in the pitch for fewer HBO shows and so I don't feel it when they get cancelled after a half-assed attempt.

Netflix shouldn't bother signing shows without a 2 year contract at this point.

Prime is a whole different beast. That's about maximizing their ecommerce profit through market manipulation.

Similar to if you engaged a realtor on a monthly subscription instead of a (roughly) fixed commission based on % of sales price - incentivizes them to spin things out.

Having legislators outlaw bad business practices is in general very slow; if competition works then it seems there should be a niche for a lump-sum/fixed commission-based dating service where they match you with the people in their database most likely to actually be compatible with you. But now that creates a new problem of measuring "successful" outcomes in matchmaking, which will be near-impossible to measure and easy for all parties to game, if it's mostly transacted by app. But it sounds in principle like the business model for traditional introduction-based matchmaking (the matchmaker only gets a good reputation if they have some successes, and most prospective customers will only be willing to pay $ for say 3-12 months).

EDIT: makes me wonder: eHarmony never opened matchmaking offices.

> Where analytics and ML does come into play is deciding which things out of their enormous catalogue they push to individual users at any one time […]

Except they don't. Only Netflix has a vague reminiscence of ML/analytics-driven recommendations. The rest of streaming platforms offer anything but personalisation, which is particularly bewildering considering the financial and engineering resources available to the streaming behemoths. I do not have subscriptions for each streaming platform out there, but out of the several ones I do, Disney+ and especially Prime are the worst offenders that throw random trash either into the home screen or into the «personalisation» section, e.g. «because you have watched The Expanse, we thought you would like an NBA season / rugby World Cup» and stuff like that. You would think that obsessively clicking the «Like» button after watching something you actually liked would influence the personalisation, except it does not. Disney+, again, fills up the home screen with garbage I would never fathom could even exist.

The thing is that with the currently available technology, building a capable (it does not have to be perfect) recommendation is not that hard. At work, we almost daily design and build solutions that employ semantic similarity search / something, and with the current crop of multimodal LLM's that can generate vector embeddings with ease, it is relatively easy to build out a recommendation engine or algorithm tailored for the needs of a specific streaming platform.

Granted, specific optimisations are required and there will be unique new challenges in there; however, crafting such a solution is well within the realm of possibility. And the amount of money required is not even that high considering that many building blocks are available as mature, managed services, or creating a bespoke and tailored in-house solution does not require starting off from the clean slate by leveraging the prior art. That was not the case, say, back in 2018, but in 2025 it is a reality. For a bizarre reason that is beyond my comprehension, almost no streaming platforms do that.

> […] that process is highly reactive, individualized, dynamic […]

That is the aspiration and the high ideal; however, something else is going on, and it is not entirely inconceivable that the marketing department is complicit in the foul play.

Apparently it works so consistently and so well that this is the first I'm learning that Prime has ads. I'm surprised they went that route.

Indeed. It was however expedient to pay lip service to the idea of promoting user wellbeing at various times (i.e. shortly post-Cambridge analytica at Facebook)

Yeah, I was working at Oculus when the wellbeing narrative started to fall apart across Meta. Was a good time to get out.

Wow that is really irritating! I used to get peacock for free with Xfinity until I fired them, but I still watched (nin-live) shows so I kept the cheapest tier. Interestingly enough, when I watch on my TV they forget to show me ads or something.

Good question. I think it's really just status quo. I got Peacock for free thru Xfinity and it was ad supported, but when I left Xfinity I just kept the same tier. Same with Hulu; my wife had ad Hulu before we got married and when we merged finances I had to reason to upgrade. But Netflix/HBO with ads just seems weird to me.

I only use it for keeping an eye on my budget, I don't really trust automated systems to cancel things for me. But it does let me know what to cancel manually.

GP responded to a comment about broadcasts, not paintings. I think the GP wasn't so far off. If you are not selling products you are still presenting viewpoints, experiences, and ideas.

And Tubi

To be clear, I was talking about Netflix, not Disney+. That's a completely different company with a different model and conflating the two is your mistake, not mine.

Prime is more like old school Disney that Disney+ is.

I remember seeing images of paintings on television so I don't agree that it would somehow be impossible.

What definition of propaganda are you using here?

Makes sense; it's definitely the case for me. I first started my Netflix subscription many years ago, because they had Star Trek shows (and in particular, they were to have the about-to-come TNG remaster). Since then, I've seen pretty much all that I wanted there, but I keep the subscription running... because of Star Trek. If they ever drop those shows, I'll cancel.

For some reason I thought they had already dropped Star Trek when it all moved to Paramount+. That's how I watch Star Trek these days anyway. If all you watch is Star Trek it's probably worth switching, because Paramount+ is cheaper than Netflix.