Ad Supported Streaming Sucks for Everyone Even Advertisers

Aside from public funded media, there's almost always a three way relationship between media companies, advertisers and audiences. Media companies and audiences don't really like advertising, but advertisers have the money available to fund media companies so they can produce content audiences actually want. Advertisers are the loud and obnoxious men in nightclubs – no one really wants them there, but you put up with them because they're paying for everyone's drinks.

Streaming had fixed this problem. By charging audiences a small direct fee, media companies could afford to operate like an exclusive members only club. Then, with massive amounts of funding from the stock market, their clubs are able to offer a lot, for very little.

However with subscriber losses, and a stock market crash it seems like that particular party is coming to an end. Selling drinks for less than cost doesn't work in the long run.

So, after being kicked out of the club, advertisers are getting asked to come back. Although, they're not being asked nicely, with Netflix reportedly seeking a $65 CPM rate to run ads on their platform when they launch in November. That's a higher rate than the Super Bowl, and more than six times higher than most ads on YouTube.

In addition Netflix won't even be offering a premium service to advertisers as their most valuable audiences – high household income households, will likely pay a premium to remain on an ad free tier of the service. Why should advertisers pay a premium to get into one club when they're still banned from the VIP section? Sounds like the party is much better down the road with Facebook and YouTube still.