If after a year you can increase the 4/5 $10 subscription customers to $12 without any pushback do you care about the vocal 1/5 who you aren’t making money off of?
They are making money off ads. The price they charge for the ads is dependent on ratings.
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I don't think ad revenue is as much as it used to be now that we have subscription models.
For example, I have a YouTube premium membership. From what I understand, X number of views by premium subscribers (paid, no ads) is way more revenue for a creator than the same number of views from ad supported subscribers. Pure ad revenue is not considered as valuable.
Say you are NBC in the 1970's. If you are an OTA broadcaster, you can sell an ad during a commercial break of prime time TV and honestly tell the buyers that the viewers of show A, B, and C during primetime will be exposed to the ad, because its literally the only way they are ever going to get to watch their favorite show. If 500,000 people are watching that show, 500,000 people are exposed to that ad.
Nowadays, you are selling that 'over the air' ad with the stipulation that:
Of the people that care to watch this prime time content live:
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Some will subscribe to NBC's or some other app, that will stream the show ad-free because they pay for an upgraded subscription to watch without commercials. BTW, NBC gets to keep that money, or take in the royalties for streaming it to the third party service. The third party service gets to make their own ad deals for ad-supported subscribers.
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Some will subscribe to those apps but not pay for no commercials, but the commercials served will be customized for that viewer, and won't be the OTA advertising you are buying.
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Some will watch it on cable. They will get your ads (depending, sometimes custom ones for cable subscribers), but now DVR's are included in a lot of our packages, so people can pause (or not) at the start of the commercial, walk away, go to the bathroom, get a beer, come back, and fast forward through the commercials, or rewind if they never paused and missed some of the show at the return of the commercial break.
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The remainder will watch it on OTA TV. I wonder what percentage that is versus all of the above?
Then there's the people (me included) who don't care about watching something live. They will watch it wherever and whenever they can, and whether they see commercials or not, none of that will be the OTA commercials that were sold by the broadcaster.
I mean, I record 5 of the local newscasts a day on a rolling 1 day retention schedule, so at any point, I can watch the newest broadcast, but fast forward through the commercials and segments that I care about. If it is 10:05 and I want to watch the 10'oclock news, I go do the dishes for 10 minutes or watch a short YouTube video, so I can start watching the news with a buffer to be able to fast forward. I can't remember the last time I tuned into the news less than 15 minutes after the hour.
I think your argument of the upset broadcast watcher and missed advertising revenue makes sense 10-15 (or maybe even 5) years ago, but the number of people in my everyday life that are shocked to learn TV is actually still broadcast over the airwaves makes me think the advertising benefits are only going to get smaller and smaller.
Obviously each geographic and demographic area is different, but that is what I am seeing around here.
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