Top Ad-Supported Streamers Earned Over $1 Billion Through October, Showing Promise and Challenges of AVOD Model
Although the $1 billion mark is an impressive figure, AVOD advertising revenues were actually down 8% from 2022.
The symbiotic relationship between ads and television has never been the most entertaining proposition for viewers. Commercials are a necessary encumbrance at best in the eyes of viewers, but for content producers they provide necessary income. Streaming platforms are no different, and a new report from MediaRadar indicates the top six ad-supported video-on-demand (AVOD) streaming plans have brought in $1 billion in ad revenues in 2023 thus far.
- MediaRadar has measure ad revenues at discovery+, Hulu, Max, Paramount+, Peacock and Pluto TV.
- Revenues have reached $1 billion in 2023 so far, but are down 8% from 2022.
- The data suggests that streamers will experiment with more ad formats in the future in order to raise revenues.
Since When is $1 Billion Not Enough?
MediaRadar took a look at discovery+, Hulu, Max, Paramount+, Peacock, and Pluto TV, the top six AVOD streamers available. It found that those platforms generated $1 billion in ad revenues between January and October. That figure is impressive, but it’s an 8% decline from the same time period in 2022, when these platforms generated $1.2 billion. Every month of 2023 saw a year-over-year decline from the same month last year in terms of streaming ad revenues at these platforms.
The report from MediaRadar breaks down which segments of ads saw the steepest declines. The restaurant and medical and pharmaceuticals categories actually increased their spending on streaming ads in 2023, while finance saw the biggest decline in spending this year.
“Streaming platforms are confronting steep hurdles around ballooning content expenses, password sharing dilution, and an uncertain economic climate. These factors are fueling downstream subscriber and advertising adversities across the industry,” MediaRadar CEO Todd Krizelman said. “As evidence of the challenges, we observed an 8 per cent year-over-year decline in ad spend across six major streaming platforms from January – October 2023. However, the streaming ad market also shows promise – these players alone account for over $1 billion in spend over this period.”
What Will Streamers Do to Increase Ad Revenues?
Having been covering the world of streaming advertising ever since 2017, The Streamable sees clear patterns emerging in how those ads will be deployed going forward. Many streamers are still getting their feet under them in terms of advertising; Netflix and Disney+ both launched ad plans in late 2022 and Prime Video is just now preparing to bring ads to its platform as well.
Streaming services will mix up their ad formats to see if they can generate more engagement, and thus more revenue. Netflix will begin tailoring ads to viewers of specific titles, which is reportedly exactly what customers want. Roku has also introduced shoppable ads to its platform that users can access with a remote.
New formats can be effective for streamers and advertisers, especially shoppable ads. One survey from January indicates that 70% of streaming users who clicked on a shoppable ad while watching actually purchased the product advertised, so there is promise in such commercials from the point of view of advertisers.
Increasing the number of ads per hour is also a strategy streaming providers can use, and another MediaRadar survey indicates that has been happening behind the scenes. Ad revenues are a critical part of the budget for streaming services, so users should expect their favorite streamer to do anything they can to increase such revenues, even in the face of a soft market.
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