Paid streaming for cheapskates is having a moment

This is Lowpass by Janko Roettgers, a newsletter on the ever-evolving intersection of tech and entertainment, syndicated just for The Verge subscribers once a week.

Streaming is getting expensive: This week, Amazon Prime Video became the latest streaming service to increase prices. In addition to the annual $139 fee for Prime, consumers now have to pay $4.99 for ad-free viewing. The increase comes after Netflix, HBO Max, Disney Plus, and Discovery Plus all raised their prices in 2025.

Those price increases don’t go unnoticed. About half of US consumers think they’re paying too much for streaming, and two out of three people who canceled a service in recent months say they did so because it was too expensive.

Roku is betting that many of those consumers turned off by high streaming prices will sign up for the company’s Howdy service instead. Launched in August, Howdy offers more than 10,000 hours of movies and TV shows, ad-free, for just $2.99 a month.

Roku CEO Anthony Wood told the audience of an investor conference earlier this month that he has been closely involved in getting Howdy off the ground. “I personally think it’s going to be a huge business for us,” he said.

With inflation picking up again, an aggressively priced streaming service for budget-conscious consumers does look like an intriguing bet. And with Roku now looking to bring Howdy to other platforms, cheap streaming may just be having a moment in 2026.

First things first: Howdy is not directly competing with Netflix, HBO Max, or any of the other premium services. You won’t find any new TV shows or expensively produced original dramas on the service. Instead, its catalog is mostly made up of older titles. Think Sleepless in Seattle, the first Paddington movie, or largely forgotten series like The Michael J. Fox Show.

“This is a lot of catalog content,” says Parks Associates entertainment research director Michael Goodman, using industry shorthand for titles making up Hollywood’s back catalogs

While Howdy’s initial catalog didn’t exactly live up to its promise of offering “almost everything you want to watch,” Roku has been steadily expanding its library: Just this week, the company announced new deals with Sony Pictures and Disney, as well as an extended partnership with Warner Bros., to beef up Howdy’s catalog.

There’s also a fair bit of overlap between Howdy and Roku’s free streaming efforts: Many of Howdy’s titles are also available for free, with ads, on the company’s Roku Channel.

The Roku Channel has been a massive success story for the company, with usage now surpassing that of Netflix among Roku households. Except not everyone wants to watch advertising. And even if you’re okay with the occasional ad break during a TV show, you might want to keep your movie nights ad-free.

“There is not one business model that fits everybody,” says Goodman. Adding ad-free streaming to its portfolio is a smart move for Roku, he argues. “You need to have multiple platforms to reach the consumer.”

Roku arguably has a long history of being able to reach budget-conscious consumers. The company never positioned its $30 streaming sticks as direct competitors to a $149 Apple TV device, and isn’t catering to people who spend thousands of dollars for the latest and greatest Samsung QLED. Instead, it became big by selling streaming dongles at cost at Best Buy and Walmart. And when it expanded into the smart TV space, it did so by teaming up with Chinese TV makers like TCL and Hisense, known for solid TVs that often retail for less than $500.

With plans to be in 100 million households globally this year, Roku also has a built-in advantage when it comes to marketing Howdy. Search for a movie like A Star Is Born on Roku, and the platform will automatically suggest subscribing to Howdy for $3 a month. Do the same on a Google TV device, and all you get is an option to rent the same film for $3.99.

Soon, you might be able to watch the Cooper-Gaga flick on platforms like Google TV with Howdy as well: Roku plans to bring the budget streaming service to third-party devices this year. “To become the scale of business I think it can be, it needs to be everywhere all major streaming services are,” Wood said about Howdy this month. “It needs to be international, [in] different countries. It needs to be off platform. It needs to be everywhere.”

If Howdy catches on, other free streamers may follow with their own paid plans, predicts Goodman. “There is potential for this to expand to other services.”

In fact, one could argue that one company has already embraced ad-free budget streaming: YouTube began offering its Premium Lite plan, which offers ad-free viewing of “most videos” for $8 a month, in the United States a year ago. (YouTube also offers a more full-fledged Premium plan that includes an ad-free music subscription, among other added benefits, for $14 a month.) Google hasn’t broken out how many subscribers Premium Lite has. Altogether, YouTube generated about $20 billion with subscriptions last year.

The big question is whether Roku can grow Howdy while keeping content licensing costs low enough to actually make a profit with it. “Subscription growth at any cost — that’s not the model today,” says Goodman, alluding to the billions of dollars the industry poured into streaming a few years ago.

When services like Apple TV Plus and Peacock launched in 2019 and 2020, respectively, they bet on undercutting Netflix with deeply discounted subscription plans — only to double the costs of those plans in the following years.

Could the same eventually happen to Howdy subscribers? Goodman thinks so. “Over time, the price will rise,” he says.