Comcast and AMC, like Hulu before it, will be letting its customers decide whether to go with a standard version of the channel or a premium version without commercials, at a price of $5 per month more.
That $5 will buy customers more than just a standard channel, commercial free. It has more in common with Showtime and HBO, which has somewhat standardized the on-demand premium television experience.
Customers have been willing to do this for Hulu, paying $11.99 per month to avoid commercials instead of the minimum $7.99 per month, but they may not do this when it comes to cable.
In a survey, 77% of the 750 Yahoo Finance readers who responded said they would not pay $5 more per month to avoid commercials on a single channel they like, AMC for example.
One likely reason is that AMC is already associated as a cable channel, something you already pay for, and that add-on services like Netflix and Hulu are just that—extra services one expects to pay for.
Ditching the ad-supported model
The cost of ditching an ad-supported model or a model that is partially ad-supported is challenging, especially given how challenging it is to get people to pay for things. But unlike online media like newspapers, television and its modern supplements—Netflix, Hulu, Amazon Prime Video, and more—have been accepted. People are willing to pay for them, making the ad-free, subscription model tenable.
In the end, of course, it all depends what a consumer is willing to pay. Surveyed on how much they would pay to get rid of commercials on cable, Yahoo Finance readers would pay an average price of $9.41 to avoid commercials. However, this average was skewed by a considerable number of people who said they would be willing to dispatch with ads for $100 per month.
Considering the fact that average person spends four years of their life watching commercials, this actually comes out to be a really incredible deal. $1,200 for an extra year of your life, maximum of four per customer.
The median Yahoo Finance reader would pay $5 per month to avoid commercials on all television, which is around one-fiftieth of what Comcast and AMC are offering with their single channel, if you have a 50-channel extended basic cable package.
So what does this mean for a commercial-free future? Outlook is not so good. If extreme gap between what people would pay ($5 for no commercials) and what a cable company suggests ($5 for no commercials on AMC) is anything to go by, commercials aren’t going anywhere.