The way the streaming industry has come full circle on advertising has been fascinating to observe. Services like Netflix began their lives trying to pull away from the way traditional TV did business, which meant that they avoided all forms of advertising. But as the streaming market has gotten increasingly crowded and costs have increased, many services have turned to ad-supported streaming as a way to reduce churn and increase revenue.
Those trends won’t be going anywhere any time soon, according to financial consulting and advisory firm Deloitte Global Insights. Deloitte recently surveyed streaming customers in five countries and found that in the United States nearly 60% of users would rather watch streaming with ads if it meant a lower or no subscription cost.
According to Deloitte, those numbers point to the future of the global streaming market. The company predicts that by the end of 2023, every major subscription video-on-demand (SVOD) service will offer an ad-supported tier to go alongside their ad-free options.
That prediction may seem bold on its face, but a quick examination of the SVOD market shows that most streaming companies will have an ad-supported option by the end of 2022. Netflix launched its plan with ads in November, and Disney+ is set to roll out such a plan on Dec. 8.
discovery+, HBO Max, Hulu, Paramount+, and Peacock already offer ad-supported plans in addition to ad-free subscription options. Prime Video and Apple TV+ are the only services that do not have an ad-supported plan either announced or in the planning stages, but according to a report Prime Video was looking to add staff to its ad-supported video-on-demand team earlier this year.
Not only will media companies be offering more ad-supported streaming, but more customers will be taking advantage of those offers, according to Deloitte. The company’s projections state that by the end of 2023, nearly 66% of the world’s streaming customers will have at least one ad-supported service in their stack of subscriptions.
Ad-supported streaming is something of a win-win. It offers reduced ad loads compared to linear TV and offers customers a subscription option at a substantial discount. It also gives media providers the opportunity to monetize their streaming services, boosting revenue and allowing for more content production. Users may have enjoyed the ad-free streaming that every service offered in the early days of on-demand video, but the future of the streaming market is definitely ad-supported.