Pulse Check: What’s Next in Streaming Fragmentation

Streaming Sticker Shock is On the Rise

Feeling like streaming costs are suddenly higher than ever? You’re not wrong — half of the major streaming platforms are now charging double what they did when they initially came to market. And with most of those services less than 10 years old, that jump in costs feels especially large.

Part of the reason for this need for higher prices on the part of streaming platforms is the increased saturation of the market. While smaller companies like Peacock and Paramount+ still have a ways to go before catching up with the subscriber numbers of their larger counterparts, platforms like Netflix have all but grabbed every available user already. So instead, the streaming giant has had to find new ways of acquiring the stragglers (see: last year’s password-sharing crackdown). 

One of the methods big and small streamers alike have used to draw in viewers interested in a cheaper price point: ad-supported tiers. And it’s already looking like an attractive compromise. 65% of consumers use ad-supported services to save money, a fact reflected in the share of viewers signing up for ad-supported tiers over ad-free. In November, Antenna found that there were 11.2 million ad-supported signups (51% of all signups) and 10.8 million for advertising-free platforms — making ad-supported the more popular of the two options for the first time.

Ad-Supported Pricing Breakdown

But even with ad-supported tiers giving viewers a break on price, how much does a user need to spend to access the content across all of the many ad-supported streaming platforms? We last checked in on the state of streaming prices in June of 2023, when it became clear that ad-supported streaming would become the norm, not the exception. And since then, every one of those platforms has raised their prices. To help you stay up to date on the latest in streaming prices and subscriber counts over the last six months, we broke it all down below.

Disney+

This platform was one of the unfortunate few to shed subscribers over the last six months. But Disney+ did officially take over Hulu last year by buying out the 33% share that Comcast previously held in the smaller platform. Many suspect that Disney plans to eventually transition to a single, unified app experience — where viewers can watch all Disney owned content in the same place. (Outside the U.S. this is already the norm on the Disney+ platform, with Hulu content labeled as Disney+ Star.) It’s unclear exactly when (or if) this transition will happen.

Hulu

Though perhaps not long for this world, Hulu saw more success in raising subscriber numbers than its parent company. 

Max

Last time we checked in on the state of ad-supported streaming, HBO Max and Discovery+ had just merged and Max was a brand-new platform. And, surprisingly, since then it seems the platform has not increased its prices. (To be fair, Max’s price tag was already on the higher side compared to other platforms.) 

Netflix

The OG streaming service faced a lot of scrutiny this year for its crackdown on password sharing and (exorbitant, to many) price hikes. But it looks like its gamble paid off — Netflix saw an 8% YOY rise in revenue as of Q3 2023, and had an influx of new subscribers during that time period. Many of those newer entrants (30%) are signing up for Netflix’s ad-supported tier, which saw plan membership rise by almost 70% quarter-over-quarter. It helps that the other lower priced tier — Basic — is no longer available to new users, and will be phased out completely sometime soon. 

Paramount+

Last time we checked in, Paramount+ had plans to absorb Showtime into their offering. And the time has come: viewers can now sign up for a tier without ads that also includes Showtime content.

Peacock

Peacock may be on the smaller side at only 30 million subscribers, but with successes like the recent streaming of an exclusive NFL game making headlines, the platform may be on its way to a winning streak. 

Amazon Prime Video

Last time we checked in, Amazon had shared its plans to switch Prime Video to an ad-supported model, with the option to go ad-free for an additional fee. And now we have the details — that ad-free tier will cost users an extra $2.99 a month on top of the existing cost of Prime. That change is set to go live on January 29th, so we have yet to see what the impacts will be on Prime Video’s subscriber numbers.

As an Advertiser, Why Should You Care?

On the advertiser side, this increase in ad-supported tiers presents a different problem than the one(s) viewers face — the increased fragmentation of the market makes it more difficult to make any content-focused buys. That’s why advertisers need to take an audience-first approach to their CTV campaigns, so that they can know they’re reaching the right audience no matter where viewers are watching their TV content. And with more and more viewers turning to ad-supported to offset rising streaming costs, there’s an even bigger opportunity on the horizon to increase that reach.