During the last quarter of 2023, 51% of SVOD gross additions were ad-supported; this share increased to 56% in Q1’24, according to data from Antenna. This meant that the streaming industry crossed a major milestone with the majority of gross subscriber additions choosing ad-supported plans for the first time.
Consumer openness to advertising varies significantly by service. In Q1’24, Antenna found that 79% of Peacock’s gross adds went to an ad-supported plan, the largest share among the nine services included in the analysis, followed by 62% for Hulu, 61% for both Paramount+ and Discovery+, and 58% for Disney+. Comparatively, Netflix, Max, AMC+, and BET+ all saw the majority of their gross adds for the quarter opting for ad-free plans. While Netflix ad-supported plans accounted for 40% of gross adds in Q1’24, it’s worth noting that this is significant growth over Q1’23 where 18% of gross adds for Netflix were ad-supported.
Sports programming and, specifically, the NFL helped to drive gross additions overall for the quarter with two significant acquisition moments occurring in Q1’24. As Antenna previously reported, Peacock’s exclusive streaming coverage of the AFC Wild Card Game in January generated 3.0M sign-ups and Super Bowl LVIII in February, which was available on Paramount+, brought in 3.4M. Because sports programming on these services features ad breaks even for ad-free users, consumers signing up for those games are likely to lean more towards ad-supported plans.
Not too long ago, the working assumption in the media industry was that the rise in streaming would mean a new era of ad-free viewing. However, users have shown a preference for lower-price plans in exchange for having ads. This sets the tone for streamers, who will have to find new ways to attract new users, while maintaining a good user experience.