NOTE: This post includes Antenna data first reported by Bloomberg on May 14, 2023.
Today marks the official start to 2023 Upfronts, where media companies unveil their upcoming lineup of programming for advertisers. And this year’s Upfronts Season has added importance for video streamers as ad-supported services and plans gain traction with consumers. Conventional wisdom would say that consumers who pay for SVOD services don’t want to sit through advertisements, so here at Antenna we decided to take a closer look at the choices consumers are making around ad-supported and ad-free Premium SVOD.
The result? Antenna data shows that 58.3% of Premium SVOD subscribers--when given a choice--are opting to have at least one ad-supported plan among their subscriptions as of the end of Q1’23. This is based on demonstrated behavior by millions of U.S. consumers who have taken some action since ad-supported plans have been available in the market, meaning they have either signed up for a new ad-supported plan or switched their existing ad-free plan to an ad-supported plan. It’s worth noting that 32% of the Premium SVOD subscribers have not taken any action to choose an ad-supported plan, either because they signed up before ad-supported plans were available and/or simply haven’t changed their plans. This consumer segment is ostensibly up-for-grabs, presenting an opportunity for both ad-free and ad-supported service tiers and providers.
In looking at the overlap of ad-supported subscriptions as of the end of Q1’23, one out of two subscribers to Discovery+, HBO Max, Hulu, or Peacock are on the ad-supported plan, BUT three out of four subscribers to Netflix Basic with Ads OR a Disney+ ad-supported plan have an ad-supported plan on other services to which they are subscribed. Said another way, Netflix and Disney ad-supported subscribers who also subscribe to another premium SVOD service are more likely to have that other service be ad-supported.
That actual transaction data shows consumers opting-in to advertising reinforces other Antenna data and what has already been seen in the market: that consumers are open to ad-supported streaming plans/services when presented with the right offer. As Antenna has previously shared, In 2020, only one in five new Gross Adds were to ad-supported plans; in 2022, it was nearly one in three. The four services that have had ad-supported plans since their inception—Peacock, Hulu, Paramount+, and Discovery+—each have at least 43% of subscribers on the ad-supported option. The proportion of 2022 Gross Adds (i.e., new customers) who selected the ad-supported option is higher than the existing subscriber base for six of the seven Premium SVODs.
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.