Where Are They Now? A Check-In on Ad-Supported Offerings
by Frankie Karrer5 min read
- Ad-supported video-on-demand (AVOD) will add 13.3 million viewers this year, bringing the total audience for these platforms to 157.1 million.
- Streaming viewers spend the largest share of their time (36%) with Hybrid SVOD/AVOD—likely because most of the top streaming services now belong in that category.
- This year, Disney+ and Paramount+ are expected to join the merger race by consolidating content from Hulu and Showtime, respectively, into each of their platforms.
If 2022 was the year that all the major streaming services joined the ranks of the ad-supported, 2023 is shaping up to be the year we see the effects of those moves. This year, AVOD services are expected to gain more than triple the US viewers than that of subscription OTT video in 2023. According to eMarketer, AVOD will add 13.3 million viewers (including 4.3 million from FASTs), bringing these platforms to a total of 157.1 million viewers. Subscription OTT services, on the other hand, will only gain 4.3 million viewers. While subscription OTT still leads at 222.2 million, the gap is definitely closing.
Most of the leading streaming companies these days offer both ad-free and ad-supported tiers on their platforms. As a result, they can better be described as “Hybrids”—giving users the ability to watch their available content however (and at whatever price point) works best for them. It’s no wonder that these kinds of platforms have the largest share of time spent by CTV viewers, as seen in the chart below.
Let’s check in with some of the top hybrid platforms, along with their pricing breakdowns, any bundles they offer, and their current subscriber counts.
Despite being one of the oldest streaming services, Netflix is one of the newer entrants into the ad-supported space. While its viewers were slow to transition to their ad-supported tier at launch, it eventually picked up steam, and industry analysts now predict that the company will reach 30 million subscribers on its “basic with ads” tier by Q3 of 2023. So it’s no wonder that, in our latest Peeks Poll, which asked marketers which streaming service ad-tier they expect will be on top by 2024, Netflix claimed the top spot.
This streaming platform took second place in our Peeks Poll—25% of marketers believe it’ll be winning the AVOD race by next year. And with reports that Disney+ and Hulu programming will be combined into one app by the end of 2023, it’s no wonder marketers are bullish on its standing in the ad-supported streaming arena.
The new baby of ad-supported streaming, Max is the result of a merger between HBO Max and Discovery+ that launched in May. (Okay, so it’s more of a Benjamin Button baby, but still.) Since the transition is still underway, we have yet to see how it’ll affect their standing in the ad-supported space.
The Paramount+ app will be following in the footsteps of Max this year by merging with Showtime on June 27th. This will bring their prices up to $5.99 for the essential tier, and $11.99 for those who want access to Showtime content.
As one of the few streaming services that offers bundles that include live programming, Hulu occupies a unique position in the ad-supported streaming space.
While this platform has fewer subscribers than its counterparts, Peacock does have the largest share percentage of ad-supported viewers. eMarketer reports that 75% of the NBC streaming service’s viewers are signed up for the ad-supported tier.
Amazon Prime Video
Technically still an SVOD, this streaming service has plans to join its Hybrid-model counterparts in the future. At the moment, prime subscribers do have access to ad-supported content in the form of FreeVee—Prime Video’s answer to free, ad-supported content. Which brings us to…
While SVODs have only recently joined the ranks of the ad-supported, free ad-supported streaming services (FASTs) have long given viewers the ability to watch content without having to pay the exorbitant prices associated with maintaining multiple subscriptions.
The most commonly used FASTs are:
- Roku Channel
(Obviously, there are no pricing tiers or subscriber numbers on FASTs. But we didn’t need to tell you that, right?)
Can Hybrids Fight the Fragmentation Fire?
While we seem to have entered the era of streaming service consolidation, many users are still overwhelmed by the number of subscriptions they need to have to access the content they want to watch. By moving away from an SVOD-dominant model toward more of a Hybrid SVOD/AVOD approach, the biggest streaming services are hard at work, trying to at least ensure that their viewers have control over their price point and watching experience.
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2 Share of US Time Spent With CTV by App Type (eMarketer)
4 Marketers Pick Netflix for Top Ad-Tier in '24 (MNTN Research)
5 Netflix: Number of Subscribers Worldwide 2023 (Statista)
10 Paramount+ Clears 60 Million Subscribers, but Streaming Losses Are Growing (Marketing Brew)
11 The Walt Disney Company Reports Second Quarter and Six Months Earnings for Fiscal 2023 Burbank, Calif. (The Walt Disney Company)
14 Amazon Plans Ad Tier for Prime Video Streaming Service (Wall Street Journal)
15 What Each Streaming Service Has up Its Sleeve in 2023 (TechCrunch)