Are ad-supported plans really better for streamers?
Are ad-supported plans really better for streamers?
New data shows there might be reason to question the conventional wisdom that ad plans are helping streamers in the long term.
In the last three years or so, the idea that streaming services benefit financially from ad-supported streaming plans has become an accepted fact. After all, streamers get to capitalize on dual revenue streams when viewers sign up for ad plans, and with the need to become profitable becoming more and more pressing, extra revenue is always a good thing. But new data from Antenna shows that there is at least reason to question if ad plans are really creating the kind of customers that streamers can rely on.
Key Details:
- Churning the waters: Antenna’s numbers show that ad plans have consistently higher churn than ad-free.
- Surviving the game: New customers have essentially the same nine-month survival rate on both types of plan.
- Mixed results: Disney+ only became profitable after launching an ad plan, but Peacock still has yet to show a profit.
The data from Antenna does show that churn rates — otherwise known as cancelation rates — are higher on ad-supported plans than ad-free ones. The average churn rate for an ad-supported plan in March 2025 was 4.96%, whereas the rate for ad-free plans was 4.13%. While that 0.86% difference might look insignificant, when looking at the size and scale of many of these streamers, it can make an impactful difference.
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There could be many reasons for this, but I suspect the main one is that viewers who sign up for an ad plan tend to think of it as the easiest to let go of because of its lower price, and because it feels like less of a premium product. Viewers are more likely to turn to ad plans for services they intend to try on a short-term basis, while services they want to stick with for the long haul are more likely to attract them to ad-free plans.
There is more encouraging data in Antenna’s survey about the loyalty of customers who use ad plans. New subscribers are almost equally likely to still be subscribed to an ad plan nine months after signing up as those who choose ad-free plans. After nine months, the average customer survival rate on ad-free plans is 43%, versus 42% for ad-supported plans.
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What explains this seeming disparity in data points? Antenna says that a big reason for the loyalty advantage displayed by ad-free plans is that legacy Netflix subscribers who are on ad-free plans and are unlikely to cancel are skewing the data. Without them, the churn rates for ad-supported and ad-free plans could be much closer together.
The additional revenue that streamers get from ad plans is undeniable. They get to collect money both from paid subscribers and from ad companies that pay to air commercials on the platforms.
But there is still room to question just how much ad plans are helping streamers in the long term. One piece of evidence that supports the idea of ad plans being beneficial is Disney+, which launched its ad tier in the fourth quarter of 2022. The company lost billions of dollars from its streaming segment that year, but the introduction of its ad plan has helped Disney turn things completely around on that front. In the first three months of 2025, Disney+ and Hulu experienced a 615% jump in profitability, ending the quarter more than $300 million in the black.
On the other side of the coin, Peacock has had an ad plan available since it launched in 2020. But in the five intervening years, Peacock has never shown a profit, though its quarterly earnings statements continue to show it inching closer to that goal.
Scale is an important factor to consider when comparing the two companies and their streamers. At last count, Peacock had 41 million subscribers, versus a total of more than 180 million between Disney+ and Hulu globally. But if Peacock’s longstanding ad-supported plan has trained customers to think of the streamer as more expendable, that could explain why the service has had a relatively hard time building a robust subscriber base.
Every major streaming service in the United States besides Apple TV+ has an ad plan, and they’re not going anywhere. More than half of new streaming subscriptions in 2024 were for ad plans, and customers are more tolerant of ads on streaming services than ever before. But Antenna’s numbers leave room to question whether ad plans are creating loyal enough customers, or if they’re simply building a new subculture of customers who are as quick to leave an ad-supported tier as they are to sign up for it.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”