Over the past year, several streaming services have launched subscriptions with ads, known as HVOD (hybrid video-on-demand). The ads make the subscription less expensive for the consumer, and in Mediavision's latest analysis, a significant growth is noted. During the first quarter, 60,000 new households subscribed to a HVOD service, bringing the total to over 250,000 households in Sweden now paying for at least one HVOD service. The lower price may also be a way for the industry to stimulate growth. After the pandemic, the streaming market in Sweden has stagnated, but the increasing number of HVOD services may change this trend.
Currently, 65 percent of households in Sweden have a paid streaming video service. It's a stable level, with no growth in the number of paying households. One way to increase consumer interest is to offer cheaper subscriptions, partially financing the service through advertising. This type of subscription is called HVOD, hybrid video-on-demand.
Since the turn of the year, 60,000 new households in Sweden have chosen to subscribe to HVOD. Today, a total of six percent, or over 250,000 households, have at least one hybrid subscription. Last autumn, several services introduced such tiers, and today Disney+, TV4 Play+, Discovery+, and Skyshowtime offer partially ad-supported alternatives in Sweden. But more services are expected to follow. Both Viaplay and the new Max (formerly HBO Max) are set to release similar solutions this year. In the USA, both Netflix and Prime Video offer cheaper ad-supported options, but nothing has been announced regarding their plans in Sweden yet.
Many actors hope that growth will pick up again thanks to these hybrid subscriptions. For the industry, this also means additional revenue through advertising. There is much evidence to suggest that this subscription model will grow, as it allows households to afford more, and cheaper, services. In many ways, this resembles how TV was financed in the past. Households are familiar with, and accept, advertising as a means of partially financing TV content.
Marie Nilsson, CEO of Mediavision explained the phenomenon: "Hybrid subscriptions are growing, and we believe this trend will continue in the years to come. A lower cost allows households to subscribe to more services. There are strong indications that advertising will also become a way to finance increasingly expensive content, such as sports. In many ways, this is a return to the conditions that existed before the streaming services were launched over ten years ago," commented.