57% of streaming subscribers choose ad-supported plans, study shows
A new Parks Associates study highlights that ad-supported tiers are becoming the dominant choice among subscribers for major streaming services such as MAX, Netflix, Disney+, Discovery+, Amazon Prime Video, Paramount+, Hulu, and Peacock, with 57% of the user base opting for ad-based plans. The shift is driven by rising subscription fees and the availability of affordable ad-supported options. Sarah Lee, Research Analyst at Parks Associates, explains, “Many video streaming services, needing to boost profits, continue to raise prices and have rolled out ad-supported plans to give subscribers options.”
While affordability is a significant factor, many users are also drawn to promotional offers or see ad-based tiers as a low-risk way to test new services. However, challenges persist, as consumers frequently report issues like repetitive ads, excessive ad breaks, and interruptions without ads being shown.
As ad-supported tiers gain popularity, the need to improve user experience becomes essential to retain subscribers and sustain ad revenue. "As services continue to raise prices and viewers shift to ad-supported tiers out of necessity, it is critical that services improve the ad-based experience or risk losing subscribers," adds Lee.
The findings will be presented at the upcoming "Future of Video: Business of Streaming" conference, scheduled for November 19-21 at Marina del Rey Marriott, California. This event will explore emerging strategies in streaming and mobile services, aiming to improve user experience and attract new subscribers.
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