How Amazon have their cake, eat their cake and eat your cake too

Streaming services are busy nickelling and diming customers — but this practice will hurt them in the long run

For years, the subscription models promised simplicity: Pay once, get full access, no fuss. But lately, customers are waking up to a new reality, one where they’re charged for the privilege of paying more. From streaming giants to digital service providers, many brands are quietly chipping away at value, layering on ads, add-ons and premium tiers that feel suspiciously like double-charging.

Sure, we get it; in a high-cost economy, businesses are under pressure to protect margins. However, the more they squeeze existing customers, the more they risk killing something far more valuable: Brand trust and loyalty.

The Amazon Prime example: Paying more to avoid what you never had before

This growing trend, where you pay a fee for a “premium” service but still get a diluted experience unless you upgrade again, is fast becoming the new face of brand overreach. And nowhere is it more obvious than in the world of streaming.

When Amazon launched Prime Video, it was pitched as an all-inclusive benefit within the Prime membership: Fast delivery and ad-free streaming for one simple annual price. But from February 2024, UK subscribers began seeing “limited advertisements” unless they coughed up another £2.99 a month to remove them. What was once an ad-free feature of the base package was now gated behind a second paywall. Loyal customers were being nudged, or tricked, into paying more for something they already had.

£2.99 may sound like small change but the backlash was swift. Surveys show around three-quarters of UK consumers say they’re unwilling to pay extra just to remove ads from a service they already pay for and almost a fifth of Prime subscribers said they'd quit the service when ads were added in.. For many, it felt like the rules of the relationship were changed mid-stream and it screamed of greed. Amazon wasn't only trying to have its cake and eat it, they were trying to eat your cake as well.

Yes, the change may deliver short-term revenue to Amazon as a portion of users opt to pay the extra fee. But the long-term risk is erosion of goodwill. People don’t like to feel they're being manipulated, and once trust is lost, it’s near impossible to get back.

Paramount+ and the “tier shuffle”

Amazon isn’t alone in this dubious practice. Paramount+ also rolled out a new UK pricing structure in 2024, introducing an ad-supported tier at £4.99, an ad-free “Standard” plan at £7.99, and a top-end “Premium” package at £10.99 for 4K streaming and Dolby Atmos.

For many subscribers, it wasn’t a new opportunity it was a major downgrade. What had previously been one standard, ad-free subscription was suddenly split into multiple levels. Some customers discovered that their accounts had been automatically shifted to the “basic with ads” version unless they manually upgraded and paid more.

To the brand, this may look like “adding choice”. To customers, it feels like losing ground. You’re paying the same, or more, and getting less. The optics are terrible: A company offering “enhanced flexibility” while quietly eroding the original value.

When you take a step back, it’s a familiar tactic. Brands rely on consumer inertia. Most people won’t cancel immediately, they’ll tolerate a few more ads or lower quality for a while. But resentment builds silently. Then, when renewal time comes round, that’s when churn begins to spike.

The hidden-fee mindset

 “Subscription squeezes” are just one expression of a broader business mindset: Keep the headline price steady, but chip away at value underneath.

We’ve seen it in travel; airlines adding seat selection fees or removing free baggage. We’ve seen it in retail; products shrinking in size while prices stay the same. Now we’re seeing it in media; where ad-supported “premium” services blur the line between value and exploitation.

Each of these tactics may feel harmless in isolation, but collectively they form a pattern consumers recognise instantly: The sense of being nickelled and dimed.

From a psychological perspective, that feeling can be more damaging than an outright price rise. When a company simply raises its price, the exchange remains clear: You pay more, you get the same. But when a company degrades the service you’re already paying for, it triggers a sense of betrayal. The price didn’t change, the promise did.

The marketing problem with squeezing customers

From a marketing perspective, nickelling and diming is where short-term monetisation collides with long-term brand equity. Content teams can’t fix a broken value proposition with clever copy. If customers feel cheated, no FAQ or cheerful email will undo it.

But communication still matters. Many of these negative reactions happen because customers are surprised. When brands hide changes in small print or rely on silent “auto-transitions”, they destroy transparency even as transparency is the foundation of modern marketing.

The irony is that brands could use their own content channels - blogs, emails, social media, FAQs - to manage this shift more honestly. Instead of “surprising and delighting”, they could explain and empathise.

Imagine if Amazon had led with:

“We’re introducing limited ads so we can keep Prime prices steady while continuing to invest in original content. You’ll have the option to remove ads if you prefer.”

That’s honest, human and clear. It still wouldn’t thrill everyone, but it would soften the blow. A message like that acknowledges customer value rather than assuming loyalty is limitless.

Transparency as a differentiator

Some brands are starting to recognise that honesty itself can be a differentiator. When Disney+ added an ad-supported plan in the UK earlier this year, it made the change explicit: New subscribers could choose between an ad tier or an ad-free one. No bait-and-switch, no downgrading of existing accounts without consent.

Transparency builds trust even when prices rise. Customers don’t expect everything to stay the same forever; they just expect not to be tricked.

For content and marketing teams, this is an important lesson: How you frame a pricing change is as critical as the change itself. Use storytelling, not small print. Show the reasons, (cost inflation, production investment, content expansion), so customers can understand the “why”, not just the “what”.

The impact on brand loyalty

Every marketer knows that retaining a customer is far cheaper than acquiring a new one. Yet brands often chase short-term revenue lifts that undermine loyalty.

Adding ads, downgrading tiers, or introducing hidden extras may boost quarterly numbers, but it chips away at the emotional connection customers have with your brand. Over time, that shows up in lower renewal rates, negative word-of-mouth, and a growing willingness to try competitors.

Churn is the final metric of broken trust. Once customers feel taken for granted, they stop defending your brand and start leaving, quietly at first, then in droves.

Final word: Stop nickelling and diming and start valuing customers

Businesses will always look for ways to optimise revenue. But when every “optimisation” comes at the customer’s expense, it stops being strategy and starts being suicide.

Be aware that UK consumers are getting wise to this tactic. Whether it’s ad-stuffed streaming, shrinking products or creeping fees, people are noticing and they're talking

For marketers and content producers, the challenge isn’t to spin the squeeze. It’s to call it out, to champion transparency, and to create content that reinforces fairness. Because in an age of endless choice, loyalty belongs to the brands that value their customers, not the ones that charge them twice for the same thing.

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