Streaming subscribers are not quitting Netflix $NFLX ( ▲ 0.64% ) or Disney $DIS ( ▼ 0.27% ) . They are just downgrading.
As prices keep rising, more viewers are abandoning ad-free plans in favor of cheaper, ad-supported tiers. According to Convergence Research Group, US streaming costs rose 12% this year, marking the fourth straight year of double-digit price increases across the top services. That sticker shock is quietly reshaping how people watch TV.
Ad tiers are doing all the growth
Morgan Stanley estimates that ad-supported plans now make up about 30% of Netflix subscribers and roughly 50% of Disney+ subscribers. That is a sharp jump from last year, when those figures were closer to 20% and 39%, respectively.
More striking, the bank believes that ad tiers accounted for more than 100% of net subscriber additions for both services in 2025. In plain English, Netflix and Disney+ likely lost ad-free subscribers this year, but added even more users through cheaper, ad-backed plans.
For streamers, that is not a problem. Ad-supported plans may cost less upfront, but they tend to generate more revenue per user once advertising is factored in.
Why streamers actually like this shift
Advertising revenue has lagged expectations so far as platforms flooded the market with new ad inventory. Morgan Stanley argues that imbalance should correct over time as ad-supported plans become the default instead of the exception.
As more viewers settle into ad tiers, pricing power shifts back to streamers. Fewer ad-free users means fewer high-cost customers to retain, and more predictable revenue from both subscriptions and advertising.
In other words, the future of streaming growth looks louder, cheaper, and much more sponsored.