Apple TV+ is the last major streaming service that doesn’t have an ad-supported tier, but that seems poised to change. Apple just hired a 14-year ad executive from NBCUniversal, Joseph Cady, to further beef up its growing video advertising team, according to a report from Business Insider Monday.
The report details how Cady will join several other former TV executives who now lead Apple’s advertising unit. Cady oversaw NBCUniversal’s partnerships with several tech companies including Amazon, Google, and TikTok. Apple has swallowed up several ad executives from NBC, DirecTV, Peacock, and other legacy media companies in the last few years.
While Apple has no official plans to introduce an ad-supported tier for Apple TV+, the company has already started showing ads for certain offerings. In 2023, Apple built an advertising network around Major League Soccer featuring Lionel Messi, selling ad packages for as much as $US4 million. If Apple were to introduce an ad tier for regular streaming, it would follow suit with the five other major streaming services.
Netflix, Disney+, and HBO Max (now just Max) have all introduced ad-supported streaming tiers. Amazon Prime Video was the latest to introduce ads to the platform, leaving just Apple TV+ as the last major streaming service to hold off on the ad-pocalypse. Many assumed that Amazon and Apple didn’t need ads like other streamers, because streaming is just a bonus to their services, though Amazon proved that assumption to be wrong.
Barclays analyst Tim Long predicted in 2023 that Apple would lose billions of dollars on creating content for streaming for years to come, according to a report from Barron’s. Apple may have been able to afford these losses initially, but Long notes that Apple needs to introduce an ad tier to meaningfully boost revenue.
Many tech companies are tightening their belt buckles lately, followed by years of overzealous hiring and spending. Meta posted a monster earnings performance in January, credited to CEO Mark Zuckerberg’s “year of efficiency.” Now, many streaming services are following suit by increasing prices and introducing ads.
Apple TV+ increased prices in October to $12.99 a month from $7.99 a month. An ad-supported tier could offer a cheaper option that would be competitive with other streamers.
The golden era of streaming may be behind us. Netflix, Hulu, Max, and other streamers are all increasing prices and introducing ads, as the subscription model has proven ineffective over the long term. The vision of streaming that was originally sold to us, as an alternative to big cable, is fading away. Apple TV+’s introduction of ads is not guaranteed, but all signs seem to point to it.