Streaming expert explains why platforms charges for subscriptions even when they have ads

A TV executive has weighed in on the importance of free streaming amid other platforms raising prices.

With streaming platforms such as Netflix continuously raising their prices leading to viewers threatening to end their subscriptions, it's no surprise customers are weighing up their options and welcoming alternatives with open arms.

However, there are reasons why platforms such as Netflix are required to charge a fee - even for the ad-included plan.

Why services such as Netflix charge, even for ad plans

Pluto TV is a completely free streaming service - able to be free as a result of showing advertisements. However, even Netflix's ad-plan comes at a cost, but why?

Well Executive VP of Paramount and International General Manager of Pluto TV, Olivier Jollet, and Nazneen Sethi, VP, Content Strategy & Programming Operations for Pluto TV, broke it down for UNILAD.

Jollet outlines a key difference between Pluto TV and platforms such as Netflix, explaining Pluto TV is ultimately 'not producing content'.

"It's a very important topic," he explains. "[...] We're not producing original content, which is actually what is very expensive on all the Subscription Video on Demand (SVOD) services."

Pluto TV shows 'a lot of live events' and has 'a lot of really fresh content', but it doesn't 'commission' content in the same way Netflix does, meaning it has 'a different business model'.

Jollet continues: "I think it's pretty well known that what is driving the expenses on the SVOD is really the production of really big original content."

While Jollet thinks producing original content is 'amazing' and 'normal' to be located 'beyond the paywall,' he highlights an 'interesting' change which has slowly been taking place - the time it takes for content to move from SVOD services to 'pure free' streaming services such as Pluto.

How much do you spend on subscriptions? (Getty Stock Images)

'Evolution not revolution'

Jollet explains the 'time between when it's on SVOD and then when it's coming on pure, free services like Pluto TV, is shrinking'.

"So you start seeing more and more content coming very quickly," he continued.

"In certain markets, we had a lot of free TV premiere which were coming directly from SVOD to Pluto TV without going on traditional TV. And I think that's the evolution of TV."

Jollet added: "In the old world you had like, pay TV and free TV and the big stuff was always be on the paywall and coming on afterwards on free TV. And in the new world, you have paid streaming and pure free streaming. I think that's just like the cycle, and it's closing the loop, I would say.

"So more and more there's crossover or, you know, much shorter windows, so you're getting access to content that users want much, much quicker," Sethi added.

Free streaming and paid services can 'coexist' (Getty Stock Images)

However, that's not to say free streaming services will simply replace paid ones.

No matter how angry some viewers get, would most of us really cancel our accounts before being able to catch the final Squid Game?

And Nazneen reflects the two can 'co-exist', drawing on how 2006 drama Psych is available to watch on both Netflix and Pluto TV.

Jollet resolves it's an 'evolution more than a revolution'.