Why consumers are increasingly opting for less expensive, ad-supported offers?

With more choice than ever in the premium SVOD category, consumers increasingly opted for less expensive, ad-supported subscriptions in 2021 than in prior years, according to Antenna data. In fact, total ad-supported sign-ups grew +117% year-over-year, from 19.4 million in 2020 to 42.2 million in 2021. Moreover, ad-supported plans accounted for 32% of all premium SVOD sign-ups in 2021, versus just 19% in 2020.

This comes despite the fact that only five of the ten services that Antenna includes in the category offer an ad-supported option: Discovery+, HBO Max, Hulu, Paramount+, and Peacock. The jump in ad-supported sign-ups translated to a +3-point increase in share of total premium SVOD subscriptions on ad-supported plan tiers, from 19% in 2020 to 22% at the end of 2021.

The complexion of subscribers by plan tier varies at the service-level. For example, Antenna data indicates that the majority of subscribers to Hulu, Paramount+ and Peacock are on the ad-supported tiers of each service. Discovery+, on the other hand, has a lower proportion of subscribers on its ad-supported tier.

Interestingly, Discovery+ charges consumers a smaller price premium to go ad-free (+$2 per month, versus +$5 per month for Paramount+ and Peacock, and +$6 per month for Hulu). Meanwhile, HBO Max launched its ad-supported option in June 2021. This plan tier did not include access to the Warner Bros. day-and-date films, which drove significant user acquisition for the service. By year-end, 8% of subscribers were on that plan.