Ad-supported streaming services have been gaining traction in recent years. Back in 2019, subscription video-on-demand services featuring an ad-supported tier had only 18 percent of the market share while 82 percent of subscribers chose ad-free tier plans. By the end of this year’s first quarter, ad-free tiers make up 25 percent of subscriptions.
Numbers are showing people are willing to watch some advertisements for a lower cost. This enables them to save some cash or, if they so choose, sign up for multiple streaming services. In a report by Antenna, one out of every three new subscribers is signing up for ad-supported tiers compared to 68 percent of newbies opting for an ad-free streaming experience.
Peacock had the most ad-supported signups for the first quarter of 2023, totaling 69 percent of new subscribers, followed by Hulu with 58 percent of new subscribers opting for the ad-supported tier. Discovery+ saw 43 percent chose to go ad-supported, Paramount+ reported 31 percent, Max had 21 percent, and Netflix tallied 18 percent.
Antenna broke down subscribers into categories. “Ad Avoiders” only choose ad-free subscriptions. “Ad Takers” only opt for ad-supported plans. “Ad Managers” are people who alternate between ad-supported and ad-free subscriptions among multiple streaming services. “Ad Oblivious” subscribers have yet to be offered a choice through their preferred streaming services, which was just about everyone before this decade started but now make up one out of every three subscribers.
Across all demographics, the Ad Manager group is the largest, totaling 46 percent of users who have made at least two subscription choices, still beating out the 29 percent of subscribers who are Ad Avoiders. Ad Takers have dropped to only 25 percent of multiple streaming service subscribers.
The pick-and-choose streaming services are steadily replacing cable as the preferred entertainment choice. People are used to ads via cable plans anyway, so opting for a cheaper option for the same type of viewing experience isn’t all too shocking. Not only is it a lot cheaper than signing up for cable television, but subscribers can also tailor their plans to watch what they want to watch when they want to watch it without having to pay big bucks for hundreds of channels they’re likely to never use.