RIP Freevee, Ad-Supported Netflix Turns Two

1. RIP Freevee

In a move that surprised absolutely no one, Amazon announced that it was “sunsetting” (one of my favorite business-speak euphemisms) Freevee, its erstwhile FAST service.

Freevee’s days were clearly numbered when Amazon made ad-supported the default tier for US users back in January, a switch most subscribers seemed completely fine with. 

Which then left us with a more existential question about why Freevee even existed if Amazon already had an ad-supported tier. Because really, how big was the subset of viewers who wanted to watch free ad-supported TV from Amazon but not pay for free two-day delivery?

Why It Matters

Amazon has never quite known what to do with Freevee, which began life as “Freedive” back in January 2019. It was alternately known as “IMDb Freedive” and then “IMDbTV” (which just tripped off the tongue) before the Seattleites settled on “Freevee” in April 2022.

But the issues over the name were the least of it.

Because the service’s biggest problem is that Amazon never let it be a thing unto itself and never did much to promote it. 

Few viewers were even aware of its existence, their main interaction being when they searched for something to watch on Prime, the results would offer up a way to rent or buy the show or movie along with an offer to “watch for free with ads on Freevee.”

If you did choose that option, you were not aware that you were being taken to a different app, not asked to download anything. The show just started playing.

In fact, I suspect most people just thought that “Freevee” was a clever portmanteau for “free TV” not an actual freestanding service.

Which is bananas, because Freevee had far more original programming than any other FAST service, often spin-offs from existing Prime Video series like Bosch, but also the James Marsden vehicle Jury Duty, which, during its one and only season, was nominated for four Emmy awards. 

And not bullshit technical ones either: they got tapped for Outstanding Comedy Series, Outstanding Writing for a Comedy Series,  Outstanding Casting for a Comedy Series and Best Supporting Actor in a Comedy Series. 

So let that sink in and think about how many people actually knew about Freevee. How many missed opportunities Amazon had to promote it. And how many Prime Video series created after the Roy Price era received that much Emmy love.

And then think about how, for Amazon, none of that really mattered.

Freevee was just a way for them to test out their ad-supported streaming products. How many ads to run, how much Amazon data to rely on, how to integrate viewing data into the viewer’s Amazon home page, how to play with the pricing on products depending on the weather, the time of day, how many times the viewer had seen the ad.

A full-scale A/B test, if you will.

But now that they’ve learned what they need to know, they’re killing off Freevee and bringing it all back to Prime Video. Which, if nothing else, will make the user experience on Prime Video a lot less confusing. 

And make Amazon a lot more money.

What You Need To Do About It

If you are one of the other streaming services, be afraid. Amazon has more and better data than you do. They have a built-in way to sell things. They have somewhere between 50 and 80 million ad-supported subscribers in the US alone. And they have even more if you count all those people watching NFL and NBA games on Amazon.

You need to find a way to make that number work in your favor, to use the fact that more and more people are watching subscription ad-supported streaming and not hating it be a tool you use to expand your ad-supported user base.

And you need to start finding a way to tie commerce more closely to your ads, so that people can buy the things they see. You just need to find a way to take into account that, unlike Instagram, TV viewing is rarely a solo project. Meaning the rest of the family is not going to react well to you hitting “pause” in order to check out and maybe buy a new pair of running shoes.

If you’re a FAST service, one less well-funded competitor to worry about. Not to mention less pressure to produce award-winning originals.

If you’re James Marsden, you tried. Jury Duty got lots of love, it helped boost your career and Amazon deserves to give you a second season or a pilot for your efforts.

2. Ad-Supported Netflix Turns Two

Ad-supported Netflix, the service hastily launched in November 2022 as a response to the Russian invasion of Ukraine, turns two today. And in its honor, Netflix announced that the ad-supported tier now has around 70 million subscribers.

Worldwide, that is.

Why It Matters

Like right-thinking companies everywhere, Netflix shut down its business in Russia after the country invaded Ukraine, a move that cost them nine million subscribers. That doesn’t sound like a whole lot of Russians, but it was enough to send their subscriber growth numbers tumbling into the negatives, a move that freaked Wall Street TF out, and led to what seemed like the hasty announcement of an ad-supported tier to counter the stock price-destroying panic.

There was a hasty deal with Microsoft Xander, rumors of sky-high CPMs, a revolving door at the top of the ad business, tales of password sharing crackdowns…and the sense they weren’t making a whole lot of headway getting users to sign up for the $6.99/month ad-supported tier.

The company is attempting to put that perception to rest as it turns two, by announcing that it is up to around 70 million ad-supported subscribers worldwide.

Worldwide.

As if we wouldn’t notice that they hadn’t broken out the US numbers.

Or included Mexico and Brazil in the “worldwide” total.

They’re also claiming that “over 50% of new Netflix sign-ups are for the ads plan in ad-supported countries.”

Which, if we’re getting Talmudic, could mean that over 50% of new sign-ups in each ad-supported country are for the ad-supported tier. Or it could mean that, on average, across all countries, over 50% of new sign-ups are for the ad-supported tier.

It’s not like they’ll ever tell us.

And then, delving further, even if it does mean over 50% in each and every country, who are those ad-supported viewers? Are they people who are in it for the long term, or are they people who are only subscribing for a month or two in order to binge-watch a particular series. (“Pausers” is the new term for them.)

And again, we’ll never know. We can only speculate.

What You Need To Do About It

If you are Netflix, you don’t need to do a whole lot of anything. Ad buyers really want to be able to buy your originals. Various industry trades are busy proclaiming you “won the streaming wars” and you can start raising those CPMs back up again.

One word of caution though—those “pausers” could prove to be a real problem. Especially if they keep coming back to the ad-free tier.

Your best bet is to make the price gap between ad-free and ad-supported tiers much steeper to push those pausers towards the latter. You can even think about imposing a Pauser Penalty, where if you “pause” more than twice a year, your re-subscription price is a lot higher. 

Or something to that effect.

If you are an advertiser or ad agency, you need to demand answers. Don’t just take it on faith. Find out exactly what percent of the US market is ad-supported and how many of those ad-supported subscribers have been continually subscribing for six months or longer.

You are well within your rights to ask, so don’t be shy.

Remember, knowledge is power.

And when someone’s not telling you something that should be a bragging point (the total number of ad-supported subscribers in the US) there’s always a reason, and it’s usually the reason you suspect.