Streaming Services Prices May Go Up As Ad Revenue Falls Impacting Cord Cutters





As the writers’ strike enters its sixth week with no compromise yet met between Writers Guild of America union members and the Alliance of Motion Picture and Television Producers, streaming ad revenue is plummeting.

MediaRadar dove deep into data samples for the first quarter ad spend to report potential advertising losses. Some categories are more vulnerable to losses than others, though streaming services have an advantage over cable networks. For starters, streaming platforms have a wealth of content to draw from, unlike cable providers who may be facing a new content drought this upcoming fall season if the writers’ strike continues much longer.

Streaming services are seeing some ad revenue losses due to production delays for several original series. This includes popular series Stranger Things, Emily in Paris, Hacks, Yellowjackets, Cobra Kai, Unstable, Big Mouth, and The Last of Us. Some streaming subscribers may find their memberships aren’t worth it if continuations of their favorite series stay in production limbo.

According to MediaPost, “prior to any effects from production stoppages, ad spend in streaming platforms was already down 28 percent year-over-year, at $352.4 million versus $486.8 million” in the first quarter of 2022. That’s a significant decline that will only be encouraged by a lack of new content.

Many streaming services use ad revenue to help keep prices down. As ad revenue falls they maybe forced to raise their price.

MediaRadar also found that television talk shows and soap operas would be especially affected by production delays and already increased advertisement spends for the first quarter of 2023. Talk shows went up 11 percent from the first quarter of 2022 when ad spend was $199.9 million. Compared to this year, talk shows reported an ad spend of $221.4 million. Soap operas ad spend went up to $59.3 million during the first quarter of this year, whereas last year they totaled $48.8 million. That’s a big jump of 23 percent increase in ad spend.

Altogether, streaming services, talk shows, and soap operas spent a total of $633.2 million during the first quarter of 2023. Streaming services could see a rapid decline in ad revenue if the above-mentioned series and a slew of others are on a production hold. Talk shows have a bit more wiggle room during the strike as they are somewhat unscripted.

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