From $NFLX to $WBD, many streaming companies are looking to transition their pricing model from a paid subscription without ads to a free subscription with ads.

Netflix is doing this to simply attract more customers. Warner Bros. Discovery is doing this because it knows that relying on paid subscriptions won't be enough to make their streaming efforts break even.

For a long time, Netflix bulls will point out that the growing number of hours that people watch content on the platform was bullish for the company. The issue I had with their view is that users can maximize the value of their subscriptions and the company is still reaping the same amount of profit that it receives from subscribers who barely watch content on Netflix.

With ad-supported subscriptions, streaming companies will be able to profit directly from the growing number of hours of content that consumers watch on these platforms. And if they're viewing content through the Roku platform, $ROKU could see its advertising business surge.

For consumers, having free access to streaming sites let's them view their favorite shows. At the same time, the incentive structure for streaming providers changes to where they're incentivized to produce higher quality content, which makes consumers even more entertained.

It will be interesting to see how profitable these streaming companies will become once they become fully reliant on advertising for revenue.