A few years ago I created a free account on Spotify. Although the free version of this streaming service does have ads, I was often given the option to watch a 30-second advertisement in order to receive 30 minutes of uninterrupted listening — for a while, that was fine with me.
However, after using the service for a few months, I began to feel that the ad frequency was increasing. During an hour-long workout the first 30 minutes would be uninterrupted, but after that an ad, would play every two to three songs.
Eventually I decided to subscribe to Spotify Premium, which I was able to get with the standard version of Hulu (with ads) and Showtime (a special for college students). Although, this means there are no more ads when I listen to music, I began noticing a similar trend on Hulu. The first few episodes I watch only have three ad breaks, but the longer I watch or the more days in a row that I’m watching, the number of ads increase.
There are threads on Reddit with people discussing this theory and sharing similar experiences.
With all of these mixed responses on both Reddit and the Hulu and Spotify community boards it’s nearly impossible to determine if these streaming services increase ads the longer a subscriber uses a free account. However the thought did spark an interesting question: is it an effective business plan to annoy your customers into spending more money?
In the cases of Spotify and Hulu, increasing the number of ads does worsen their subscribers’ experiences. While some people on the community boards stated that their irritation with the increased number of ads was going to cause them to leave the platform entirely, how many subscribers upgraded to Premium to stop the annoying ad interruptions?
Spotify did have a higher than expected number of subscribers join Premium after they increased the features that unpaid users were able to have with their accounts, which were originally only available to Premium subscribers. This may sound like reverse psychology, but Fortune Magazine stated that allowing their users to have a taste of the Premium benefits may make people more likely to upgrade their account. Free trials are another way to let users sample the Premium experience.
In relation to ads, showing them frequently and then offering 30 minutes of uninterrupted listening time would show users how convenient it would be to never have ads.
Streaming services are not the only businesses that test this model of encouraging consumers to spend more money by worsening the user experience.
Think about retail companies that offer free shipping for an online order but only once you have purchased a certain amount. Or retail companies that give you special discounts but only on select items so you end up spending more time (and money) trying to find an item that will work with the discount.
Creating this experience for your users is understandable — profit is always the most important bottom line. But, I had always assumed that companies would make the user experience as convenient as possible in order to increase their profits. In reality it seems that companies may be dangling benefits in front of consumers with the promise of convenience once more money is spent.
In some cases this is effectively worsening the user’s experience while still encouraging them to spend more money. This concept sounds bizarre and yet it works on me and many others. I know that I will continue to pay to avoid ads and will probably add more items to my online shopping bag to get free shipping, so as a business model it does seem to work.