Lawsuit against Prime Video ads shows perils of annual streaming subscriptions

From pinching pennies to feeling the squeeze

If you’re the type of person who likes to buy in bulk or goes overboard when there’s a sale, you might be tempted to sign up for a yearlong subscription to a streaming service. After all, when offered, the monthly savings are undeniable:

A yearlong commitment is unappealing for many people, but when faced with the cost of numerous subscription services, the savings can be hard to pass up.

But annual plans have ended up falling short so frequently that many traditional cable companies have moved away from them. Verizon, for example, stopped locking people into annual contracts in 2020 to compete better with streaming services. Optimum brags about not requiring annual contracts, too (Optimum cable does require signing up for Internet, though).

But after pinching pennies by opting for a yearlong subscription, you might eventually feel the squeeze from your streaming service provider.

Beyond the sudden removal of services like HDR and the addition of advertisements, streaming services are known to lose treasured swaths of content, including programs that are not or never were available outside of streaming. And with most streaming services not providing outsiders with detailed information on ratings and what other data they use, it’s hard to predict or understand what movies and shows a streaming service will maintain over the next 52 weeks.

Flexibility is an advantage

Streaming is seemingly the future for watching TV and movies, and now is the pivotal time when viewers are deciding how it compares to traditional media. Companies like Amazon, Disney, and Warner Bros. Discovery are furiously fighting to turn streaming into lucrative long-term businesses, leading to experimentation with things like advertisements, joint apps, mergers, and prices. As streaming figures all that out, it may be prudent for subscribers to weigh the value of these services monthly. Because in a year, who knows what you’ll get.

For streaming services, however, it’s beneficial to lock in users for a year. For one, there’s less chance for subscribers to evaluate whether they still want the service. But an annual contract is also a way for cable providers streaming services to lock people into a service that could change and become less valuable (it’s helpful to understand streaming services’ refund policies, too).

The lawsuit filed against Prime Video might not lead to any dramatic changes. But it’s a good reminder to streaming customers that it’s risky to form long-term commitments with streaming companies that are in a state of flux.