> Hulu with ads is for pay and really successful

At least two caveats to that, though:

1. A lot of the people on that tier probably got it for $0.99 a month or another promo deal that they've had. (They never have promo deals on the ad-free tier.)

2. Hulu started out without an ad-free tier and only later added one. There are probably still a decent amount of people who just never upgraded, but that doesn't necessarily mean they wouldn't have taken the ad-free version instead if it was available from the beginning. (There's a difference between deciding to pay more to not get ads when you had apparently already been okay with dealing with them vs. deciding to intentionally see ads in order to save a few bucks.)

My pattern is to try out a service: Get hooked on a long running show that I missed. Get annoyed by the repetitive commercials. Move up a tier. This happened recently with Hulu. Made it 3 seasons into Bob’s Burgers and couldn’t take it anymore. Life has been great since I upgraded.

Alternatively, not find a show and let the relationship fizzle: Peacock, Paramount, etc.

Hulu's ad-enabled service is also successful because there's no compromise in video quality between the ad-enabled and the ad-free versions. That's not the case on Netflix. You'll get a downgraded video quality if you go from the Standard or the Ultra plan to 'Basic with Ads'.

The downgrade makes sense depending on how much of a gap there is in price. If you really don't care that much about ads, then you cut your price in half with Hulu by downgrading.

Netflix is even more expensive and is likely the most expensive service people own.

So if you don't care about ads, you cut your price by more than half. An money concious person is going to realize that over a year that's a nice chunk of money. Hell you can talke the savings from the ad tier and then get another serivice like Hulu on ad tier.