As the global video streaming market continues to grow and become increasingly crowded, streaming businesses are looking for ways to maintain their growth and competitive edge. According to a new global B2B industry survey by NPAW, 76% of subscription-based video on-demand companies plan to introduce ads by 2025.
Furthermore, NPAW’s “2023 State of Streaming Advertising and Analytics” survey reveals that implementing a hybrid model (an ad-supported tier plus a premium, subscription-based one) is the preferred path for 59% of them – a move all these respondents agree is aimed at lowering the price of subscriptions.
The survey reveals how ad-based video streaming models are on the rise because of their potential to increase platform revenues and reduce subscription prices, a win-win for streaming services and consumers in a time of economic uncertainty and market saturation. It also shows that the adoption of third-party video and advertising analytics in the industry is still fairly low, yet quickly increasing as providers recognize the strategic advantage of comprehensive, real-time data.
According to the report, adoption of third-party video analytics is well underway, especially in the telecom industry. About half of streaming companies (47%) are already using a third-party video analytics tool to track platform performance and user behavior, while 39% plan to do so. The adoption of these tools is higher in the Telecom industry (54%) than in Media & Entertainment (40%), suggesting telcos started pursuing a data-driven approach earlier on.
Meanwhile, the report notes that ad server data is a first step towards understanding ad performance, but it only paints a partial picture. In fact, 39% of ad-based services do not fully trust their ad server data. However, only 25% are using a third-party advertising analytics tool in addition to or instead of their ad server.
At the same time, despite the still fairly low adoption levels of third-party ad analytics tools, 100% of all ad-based streaming companies currently not using one are planning to do so this year. In detail, 34% say they will implement one within months, while 44% will deploy one by the end of 2023.
“It is encouraging to see that more and more companies are taking a data-driven approach to running their video business, especially as the industry’s shift to ads brings a unique set of measurement challenges. To truly make the most of their advertising-based streaming business, video providers will need an advanced, third-party ad analytics tool – one that can help them track ad performance from an end-user perspective and correlate that information with insights about user behavior and content preferences,” said Till Sudworth, Chief Marketing Officer of NPAW.