Consumers continue to cozy up to ad-supported streaming as prices rise
Consumers continue to cozy up to ad-supported streaming as prices rise
Since the fourth quarter of 2024, more than 50% of gross streaming subscriptions have been for ad-supported plans.
It was once unthinkable to watch an on-demand streaming service like Netflix with ads. Streaming was supposed to be a haven from the non-stop bombardment of commercials found on broadcast and cable TV channels, but the landscape has changed in 2024. Streamers have embraced ads as the price for subscriptions continues to rise, and a new study from Antenna shows that customers are also continuing to respond positively to ads.
Key Details:
- Antenna found that as of the third quarter of 2024, 43% of all paid streaming subscriptions are for ad-supported plans.
- During the same quarter, 56% of gross additions were for ad plans.
- Peacock has the highest proportion of new customers signing up for its ad tier at 78%.
The data from Antenna shows conclusively how much consumers have warmed to the idea of ad-supported streaming in recent years. In the second quarter of 2022, fewer than 30% of customers were using ad plans. Fast-forwarding to the third quarter of 2024 — just over two years later — the number has jumped to 43%.
Gross additions for ad-supported plans are also rising. In Q3, 56% of all new gross streaming subscriptions were for ad-supported plans, and the number has been above 50% every quarter stretching back to Q4 of 2023. Ad-supported gross adds grew 48.9% year-over-year (vs Q3’23) while ad-free gross adds declined -13.6% over the same period.
Click images to expand.
Nearly every major streamer that didn’t have an ad tier at the end of 2022 has launched one since, including Netflix, Disney+, and Prime Video. Ad plans allow customers to pay less for a subscription and also raise the coveted average revenue per user metric for providers since they get to collect subscription fees from customers and ad revenues from companies who pay to air commercials on their streamers.
So which streamers are benefitting the most from the increased willingness to accept ads? Antenna’s data shows that Peacock sees 78% of new customers sign up for its ad plan; Hulu and Disney+ are next, with 63% and 62% of new customers respectively choosing their ad tiers. The fact that the numbers are so close together shows that many customers are opting to subscribe to both services at once via the Disney Bundle.
Netflix still isn’t seeing the kind of success that other services are in getting viewers to pick their ad plans, but it’s improving nonetheless. Antenna’s numbers show that in Q3 of 2023, Netflix was drawing only 28% of new customers to its Standard with Ads plan; this year, that number has risen to 44%.
Antenna’s numbers show definitively that customers are more willing than ever to accept streaming ads, which will serve as a surprise to no one who’s tried to buy a new streaming subscription in recent months. Prices continue to rise, forcing customers to choose between putting up with commercials or not being able to afford a given streamer at all.
Peacock
Peacock is a subscription video streaming service from NBCUniversal that includes original shows, blockbuster movies, and classic television series. Peacock is home to “Yellowstone,” and “The Office,” as well as original hits like “Poker Face” and “Bel-Air.” You can also watch live sports including NFL, MLB, WWE, Olympics, Premier League, NASCAR, French Open, College Football and Basketball, and PGA Tour. Premium Plus subscribers can stream their local NBC feed in all 210 markets.