Netflix and Disney+ are seeing a significant shift in their subscriber bases, with a growing number of users opting for cheaper ad-supported tiers rather than maintaining their ad-free subscriptions. Streaming prices in the U.S. have risen 12% this year alone, marking the fourth consecutive year of double-digit increases among the top streaming services. This trend has prompted many subscribers to abandon their more expensive, ad-free plans in favor of these lower-cost options, which still generate more revenue per user for the platforms. Morgan Stanley's latest analysis reveals that ad-supported subscriptions now account for 30% of Netflix's users and half of Disney+'s. These figures are up from 20% and 39%, respectively, just a year prior. The firm suggests that all net subscriber growth for both companies in 2023 came exclusively from these ad tiers, with the number of ad-free subscribers actually declining. They predict that this trend will continue, with ad-supported subscriptions becoming the primary driver of growth in the streaming market. Despite some initial challenges, the revenue from advertising is expected to improve as more streaming services expand their ad offerings. Morgan Stanley notes that the current oversupply of ad inventory could stabilize as demand picks up. This shift indicates a fundamental change in how consumers engage with streaming services, moving towards budget-friendly options as pricing pressures mount.