Analysis: 100m on streamer ad tiers
August 1, 2023
Research from Ampere Analysis shows that ad-supported tiers are growing in the US. Currently, Hulu, Peacock and Paramount+ represent the bulk of subscriptions. However, uptake is growing for players such as Netflix, driven in no small part by its account-sharing crackdown, and for Disney+, which increased its price alongside launching the ad tier.
Here’s the current state of ad-supported subscriptions according to Ampere’s own estimates:
- Currently, more than 1 million US Netflix accounts are on the ad-supported tier, representing nearly 2 per cent of the entire subscriber base, whilst around 800k Disney+ accounts are on the ad-supported tier, representing around 2 per cent of its subscriber base.
- Prior to the launch of Max, Discovery+ had in the region of 10 million ad-supported accounts. HBO Max had around 2 million.
- Ampere expects that more than 90 per cent of Hulu subscribers are on the ad-supported tier, representing around 45 million subscriptions. Hulu launched as an ad-supported subscription service in 2010, before launching its ad-free tier in 2015.
- Peacock has the most ad-supported subscribers of any new US OTT service, with more than 30 million ad-supported subscribers.
- Paramount+ is not far behind Peacock, with more than 25 million ad-supported subscribers to its service in the US.
- Ampere expects that ad-supported subscription tiers in the US will generate more than $10 billion (€9bn) in advertising revenue in 2027.
Ampere’s view is that hybrid services are an increasingly important element of streaming service monetisation, and hybrid tiers often generate more revenue per subscription than their ad-free counterparts – a key reason why Netflix has begun to remove the option for new subscribers to take the ad-free basic tier in many of its markets. The tiers also represent a way for consumers to maintain a wider array of subscriptions while economic times remain tough.