Study: Ad-Supported Streaming Grew to 44.5 Million Users in 2022; Why Are Plans with Ads so Popular?
Study: Ad-Supported Streaming Grew to 44.5 Million Users in 2022; Why Are Plans with Ads so Popular?
Streaming was supposed to make commercials a thing of the past. When Netflix first pivoted away from DVDs by mail and began offering streaming content, one of its main selling points was that users could watch shows and movies on the service without ever having to worry about seeing an ad.
But that was over a decade ago now, and the streaming landscape has seen an astounding amount of growth in that time. With growth comes big changes, and nowadays nearly every streaming service offers both an ad-supported and ad-free tier, including Netflix. According to new data from the media research firm Antenna, customers have responded enthusiastically to the spread of plans with ads on subscription video-on-demand (SVOD) services.
Antenna’s data indicates that in 2022, ad-supported plans accounted for nearly one in three (32%) of all premium SVOD signups, up from below one in five (18%) in 2020. Year-over-year, ad-supported signups grew 29.8% from 34.3 million in 2021 to 44.5M in 2022. Comparatively, signups for ad-free plans grew just 8.7% year-over-year, from 87.0M in 2021 to 94.5M last year.
Looking at the overall picture, ad-supported tiers accounted for 25% of premium SVOD subscriptions by the end of the first quarter of 2023. Year-over-year, ad-supported subscriptions grew 24.6% to 55.2 million in Q1 of this year. Meanwhile, ad-free subscriptions grew just 6.5% over the past year up to 169.8 million at the end of the first quarter of this year.
The additions of ad-supported tiers to both Netflix and Disney+ in late 2022 no doubt aided this impressive growth for streaming plans with commercials. But the numbers from Antenna indicate that ad-supported streaming first caught fire in 2021, as sign-ups to plans with ads jumped 10% over 2020’s numbers. That was well before Disney+ Basic and Netflix Standard with Ads became available, and shows that there is something else behind the public’s rush to ad-supported plans.
The lower cost of ad-supported streaming is undoubtedly one of the big reasons it’s gaining in popularity. The cost of streaming, once seen as a pittance compared to cable and satellite subscriptions, is steadily creeping up. Last year, the average American household paid $374 for their streaming subscriptions, a jump of 18% over 2021’s figures.
But ad-supported streaming plans usually cost between 30%-50% less than ad-free versions, and adding a couple of plans with ads to the streaming stack can allow users to justify paying for another service. As inflation continues to worry cost-conscious cord-cutters around the globe, having an ad-supported option to fall back on is key for consumers.
Ad loads on streaming are also significantly lower than broadcast television; although a recent survey found that ads per hour were climbing among streaming services, even the most commercial-laden services only show between 7-10 minutes of ads per hour. That’s a far cry from broadcast TV, which usually carries around double the amount of commercials.
Ad-free streaming isn’t going away, as many users are quite willing to pay a little more not to be hounded by advertisers at every opportunity. But streamers make more money per customer from ad-supported plans than ad-free, so the new data from Antenna regarding the adoption of streaming with commercials is music to the ears of providers.
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.”