Survey: 25% of Streaming Subscriptions in 2023 Are for Ad-supported Tiers; 1 in 3 Use a Free Ad-Supported Platform
Survey: 25% of Streaming Subscriptions in 2023 Are for Ad-supported Tiers; 1 in 3 Use a Free Ad-Supported Platform
The softness of the advertising market has been well-documented in 2023. Advertisers are hurting as it is, and there is data to suggest that a prolonged strike by Hollywood writers and actors could cut advertising revenues even more deeply.
Samba TV has released its “State of Viewership” report for the first half of 2023, and it contains some insights for where advertisers can find more eyes for their commercials. The report indicates that streaming customers in the United States are increasingly adopting subscription video-on-demand (SVOD) services with ads, and cites data from Antenna which shows that 25% of all streaming subscriptions in the first half of 2023 were on ad-supported plans. Peacock led the way, with 69% of all new sign-ups being for its ad-supported Premium plan.
Note: the ‘Sign-ups by plan tier’ graph incorrectly swaps the colors for ad-supported and ad-free plans.
The numbers confirm that Disney+ is continuing to outpace Netflix when it comes to sign ups for ad plans. Disney and Netflix both released ad-supported streaming tiers around the same time in late 2022, but while more than a third (36%) of new Disney+ subscriptions went to its tier with ads, Netflix’s Standard with Ads plan is drawing 18% of its new sign-ups. That helps to explain why Netflix eliminated its cheapest ad-free tier in the U.S. and other territories, to better differentiate its ad-supported and ad-free plans.
Overall, 60% of U.S. adults say they’d be willing to watch an ad-supported streaming plan in exchange for a lower price point. This is borne out by the amount of time American audiences are spending with free ad-supported TV (FAST) services lately; one in three U.S. streaming customers subscribe to at least one FAST platform, and Freevee, Pluto TV, Tubi, The Roku Channel and Crackle all saw their viewership grow year-over-year in the first half of 2023. Netflix and Peacock both saw their viewership decline over the same time period.
The average TV watcher in the U.S. uses more than six sources to get their video, so it’s clear to see why free streaming platforms are seeing such a rise in usage. Subscription prices are continuing to increase, and with many viewers paying $60, $70 or $80 per month for their various video sources, finding free streaming platforms can be key to filling in entertainment gaps.
Nearly every company with a streaming service now offers an ad-supported plan or FAST platform to reach viewers with, and advertisers would do well to focus their efforts there as linear TV continues its downward spiral. Ad-supported streaming will only continue to gain in popularity as budgetary concerns force more consumers to rethink their entertainment budgets.
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.”