Today we’re releasing the latest installment of our quarterly report series, “Antenna’s State of Subscriptions,” with a focus on advertising in subscription streaming video.
For the past fifty years in many markets, including the U.S., the video industry has functioned primarily on a dual revenue-stream model. In other words, television networks and pay-TV operators have shared the revenue that consumers paid for access subscriptions, and have also shared the revenue generated by advertisements that ran during the programs.
However, as Netflix gained mass traction with an ad-free video service, it called into question the future role of advertising in the premium video industry. What’s more, as popular as the Netflix proposition was, Hulu and other early streamers also demonstrated that presenting consumers with a choice to opt in to advertising at a lower price tier could also be viable. These competing approaches left the industry contemplating what would be the primary business model of the video industry going forward.
The fierce competition of the so-called streaming wars of the past three years has settled that debate. Lower-cost ad-supported plans have provided consumers with the ability to afford more services with their entertainment wallet, and a majority of them view that option as a viable trade-off.
While the viability of ad-supported plans is firmly established, the popularity varies significantly across services. To explain, two-in-three subscribers signing up for Peacock in Q1 2023 chose the ad-supported plan, whereas fewer than one-in-five selected the ad-supported option for HBO Max and Netflix. Nonetheless, Disney+’s ad plan has been showing early traction since its December launch, with over one-in-three new subscribers selecting it
In this edition of Antenna's State of Subscriptions Report, we’re trying to better understand and categorize consumer behavior in the midst of this proliferation of services, plan tiers, and choice. To that end, we’ve established four different consumer segments to better analyze the ways that consumers choose advertising in subscription video. In addition, we look at how some of these consumer segments are behaving in the marketplace, and a perspective on what specific factors are driving consumers’ ad choices.
If you’re interested in downloading a copy of the full report, you can sign-up to receive it automatically on our homepage. If you’re already on our distribution list, check your email - we’ve sent out a download link to everyone who has opted-in to receive communication from Antenna.
For more detailed information on Antenna’s methodology and definitions of core metrics, please visit http://www.antenna.live/methodology.
Brendan Brady is a Content Strategy Associate at Antenna, a measurement and analytics company providing insight into purchase behavior and subscription metrics across the new media landscape.