LONDON—As consumers continue to feel pressure from the rising cost of living, one researcher predicts that the increasing popularity of ad-supported streaming subscription services will reshape the streaming business.

According to Ampere Analysis, ad tiers are now the dominant monetization model in North America, and the research firm expects them to account for more than half (54%) of total subscription streaming service revenues in the region by year-end. As the world;s most mature streaming market increasingly relies on advertising to drive growth, Ampere says the region offers a clear indication of where the global streaming market is heading.

Ampere expects revenues from advertising alone will exceed $18 billion in North America this year, accounting for more than one-fifth of total subscription OTT revenues for the first time.

To illustrate how this could influence the world market, North America currently dominates the global ad-supported subscription OTT market, accounting for nearly 60% of global revenue. Platforms in this region benefit from stronger subscription ARPUs, higher CPMs, a more mature connected-TV advertising environment and a greater consumer acceptance of ads. As subscriber growth slows elsewhere, the region is suggesting the direction of travel for the global streaming market, Ampere said. Consumer goods and retail companies are leading the shift to streaming advertising, with Procter & Gamble, Amazon and Walmart accounting for 22% of U.S. subscription OTT advertising impressions so far in 2026.

Amazon’s Prime Video, which began charging subscribers a monthly fee to skip ads starting in 2023, leads the North American ad-supported subscription OTT market, with revenues expected to exceed $14 billion in 2026. In contrast, Netflix and Disney+ have encouraged users to choose their ad tiers, offering a lower price point and fewer ads.

"Advertising has become a fundamental part of streamers' business models, changing both how success is measured and the content they commission,” Ampere Analysis Research Manager Rory Gooderick said. “As subscriber growth slows in mature markets, the focus has shifted towards driving engagement and habitual viewing. The challenge now is to increase monetization without compromising the premium viewing experience that these streamers have spent years cultivating.”

A new study from Antenna finds that Roku’s $2.99 a month ad-free streamer has racked up more than 1 million subs since it was first introduced in August of 2025. The Antenna study also found that Howdy is also achieving retention rates exceeding those of Premium SVOD averages.

The researchers noted that when it first launched there was some skepticism about Howdy’s chances in a competitive market of well-established streaming platforms.

Antenna estimates that Roku’s Howdy confounded those expectations by adding nearly 300K Subscribers in its first month and then added 100K or more in each subsequent month.

The streamer’s success was also built on a unique distribution strategy, as it was initially available only through Roku-owned platforms, like The Roku Channel.

Howdy drove a significant amount of activity, accounting for 23% of all SVOD Sign-ups via The Roku Channel since launch. With more than 100 million streaming households on its platform, Roku has a powerful built-in distribution channel, the researcher reported.

More information is available here.

NEW YORK—In a notable new analysis of the programming trends that are reshaping the streaming industry, Nielsen’s Gracenote is reporting that sports program offerings across the top five subscription video-on-demand (SVOD) services jumped 52% year-over-year (YoY) and that news content on FAST channels was up 58%.

The sharp increase in sports content, which is based on the latest Gracenote Data Hub information, underscores the importance of sports content (live games + related content) to providers’ audience engagement strategies.

In the new analysis, Gracenote found that over the past year, Paramount+ has vaulted past Amazon Prime Video and Netflix to lead in streaming sports programming at the individual game and event level.

Following its acquisition of UFC broadcast rights from ESPN starting in January 2026, the service now delivers more than twice the sports content of any SVOD platform, up 219% YoY. During the same period, the Disney+ sports catalog contracted by 23%.

The new study also highlighted the proliferation of FAST channel, led by news and sports services. Gracenote’s analysis of 2,060 FAST channels available worldwide revealed that sports content on FAST grew 30% YoY. With more than 200 dedicated news channels now available, news programming on free ad-supported streaming services increased 58%. Movies and TV shows available on FAST rose 26% and 24% YoY respectively.

The data comes from the Gracenote Data Hub, which was launched in November 2024. It provides insight into the content available on leading global SVOD services and FAST channels. The resource taps Gracenote Global Video Data, the industry’s most comprehensive database of TV and movie information which powers advanced content search, discovery and recommendations capabilities. Updated quarterly, the Hub’s visualizations reveal how leading SVOD catalogs and FAST channels are evolving over time and what these shifts signal, the company said.

Many cord-cutters looking to reduce their monthly cable or satellite bills are also cutting back on streaming costs, according to new research from All About Cookies. The independent digital privacy education site found that 74% of consumers dropped a streaming service in the past year because of rising prices or switched to a cheaper or ad-supported option.

The research found that, on average, Americans subscribe to 3.4 streaming services. Twenty-seven percent subscribe to five or more services, and the average amount paid monthly for streaming subscriptions is $48.13.

The new research underscored the extent to which the public has dropped traditional TV sources like cable and satellite. Less than one-third (30%) of Americans now use these traditional TV services, the survey found.

When asked if they regretted cutting the cord to get rid of cable or satellite TV subscriptions, only 5% of respondents said they did, All About Cookies reported.

The research also looked at what people use to watch TV. Ninety percent of respondents said they subscribe to paid streaming services, up 14% from 2024; 58% use free streaming services, up 15% from 2024; 30% use cable or satellite, down 16% from last year; 18% report using an antenna and free broadcasts, up 3% from last year; and the percentage of those who do not watch TV at all remained the same compared to 2024, standing at 2%.

When it comes to the percentage of people subscribing to various popular paid streaming services, Netflix and Prime Video ran neck in neck in 2025, with 69% of respondents reporting subscribing to the former and 66% to the latter. Bringing up the rear were Apple TV at 15% and YouTube TV at 12%, All About Cookies found.

The findings are based on a survey of 1,000 U.S. adults last month via Prolific. All anonymous respondents were older than 18 and were U.S. citizens.

More information is available on the All About Cookies website.

RESTON, Va.—Comscore’s new “2025 State of Streaming” report highlights the growing importance of ad-supported streaming services and FAST channels, with data showing big gains across the board for those services.

According to the report, total hours watched across major free ad supported streaming services grew by 43% year-over-year this August compared to August 2024.

Ad-supported tiers have also gained popularity across major subscription video-on-demand (SVOD) services. Netflix now sees 45% of total household viewing hours on its ad-supported tier, up from 34% just one year ago.

“Consumers are navigating crowded streaming options with the clear intention that they want value, simplicity, and content that’s easy to access,” said Jen Carton, Comscore’s senior vice president of product management. “This year’s State of Streaming reflects that shift and shows how FAST and ad-supported options are meeting those needs in a way that’s culturally resonant and commercially viable. For Comscore, our mission is to illuminate this transformation and help the industry understand what’s next.”

Overall, connected TV streaming in internet-enabled homes reached 96.4 million households, an increase of 849,000 year-over-year, the new Comscore study indicated.

Time spent streaming rose to 13.9 billion hours, a 6% increase year-over-year. The average household watched content from 6.9 streaming services, reflecting modest growth as the market reaches maturity, Comscore reported.

With households now streaming video for nearly 5 hours per day, it has become the default viewing experience for millions of Americans, the researchers said. For many households, creator-driven video sits alongside premium series, sports and films as everyday viewing. Platforms like YouTube are no longer viewed as “separate categories” but as integral parts of the streaming diet. As the report points out, “more than half of U.S. households stream YouTube content monthly for free.”

The full State of Streaming 2025 report, which explores the trends shaping the future of content, advertising, and technology across screens, is available here.

SAN JOSE, Calif.—Viewers are increasing their consumption of local TV content according to TiVo's latest report on video trends.

The results of TiVo’s Q2 2025 Video Trends Report show that the importance of local content has increased over the past year, with 61% of respondents noting that it is somewhat or very important compared to 54.8% in Q2 2024. More so, 29.8% of all time spent watching video is spent watching local content, compared to 21% in Q2 2024 and 22.6% in Q2 2023.

The report, released this week, also shows video service bundles continue to gain traction, indicating that consumers value the ability to access content across multiple services. Despite price increases and cost-conscious consumers, video spend is up year-over-year, as is the time spent watching video content. The average number of services consumers use has climbed from nine to 10, further underscoring the trend.

Bundles enable consumers to access various types of content, letting them stay in the same service or family of apps to meet a variety of viewership needs. Of the available services, 87% of respondents use SVOD services, with the top three ad-supported SVOD tiers being Peacock (69.3%), Paramount+ (59.7%), and Prime Video (59.1%). Subscribers select services based on the available content, seeking expansive programming libraries (38.4%), original content (35.2%) and specific show availability (29.8%).

“Today’s content landscape is full of unparalleled choice and variety, as consumers have more options than ever before,” said Xperi’s chief product and services officer Geir Skaaden. “Consumers are looking for simplification by increasingly opting into the bundles and platforms that provide the highest-quality content for their household at the best value. These offerings are delivering the convenience of a single destination for diverse content, now enhanced by personalization and immediate access that provides a seamless viewership experience.”

The report also found:

• Backseat binging: The rear passenger seat is the most popular spot for in-car viewing, with 42.3% of passengers watching from there. Respondents who watch video in-car spend 56.7% watching short-form content and 43.3% watching long-form, remaining consistent with last year’s breakdown.
• Cord cutters remorse: The share of respondents who cut the cord but later decided to resubscribe to a traditional TV service increased about 10% to 31.9% in Q2 2025. When it comes to potential cord cutters’ preferred methods for watching live TV without cable, most still express a preference for a live TV streaming service with the distribution of prospective methods remaining relatively consistent.
• Smart TVs are a smart buy: Smart TV ownership continues to rise (75.2%) and more than half of respondents (55%) considered the TV platform to be at least moderately important, up 5% from Q2 2024.
• When you watch TV matters: The latest report details the first major shift in daytime viewership. Q2 2025 saw that 41.5% of SVOD content is consumed during primetime, with 15.5% of SVOD content consumed during the morning, compared to 48.6% and 11% in Q2 2024.

The latest TiVo Video Trends Report surveyed 4,510 adults 18 and older living in the U.S. and Canada (3,509 from the U.S. and 1,001 from Canada) during the second quarter of 2025.

More information is available on the company’s website.

The video industry today is fundamentally different to what it was in its early days when SVOD dominated the landscape. Subscription fatigue and over stretched budgets have caused churn rates to increase and providers have been forced to adapt monetization models in response to changing consumer preferences.

AVOD is surging in popularity, linear format services in the form of FAST are gaining traction, and data shows that viewers, particularly younger viewers, are increasingly open to TVOD (Transactional Video-on-Demand) and PPV (Pay-Per-View) options.

Hybrid business models combining subscription, advertising, and transactional elements have become popular as video services try to combat churn and offer audiences as much choice as possible in ways to watch content.

Another approach gaining in popularity is "freemium" tiers which aims to attract a wide audience by offering free content with ads, while generating additional revenue through premium content behind a paywall. With so many possible permutations in business models, it’s become increasingly difficult for video services to know which model or combinations of models is right for them individually.

Evaluating the Different Models with Audience in Mind
AVOD’s primary appeal to viewers is that it allows free or lower cost access to content. This is of course more appealing to some consumers than others which is why when you weigh up the merits of the different business models, it’s critical to do so with the target audience in mind. Viewers with higher disposable income often lean toward subscription services, while those with tighter budgets, or who are simply more tolerant of ads, may prefer ad-supported options.

So, when factoring in whether SVOD or AVOD is a better option, or perhaps a blend of the two with a premium tier offering ad free viewing and a reduced cost tier showing ad supported content, you first need to know your audience. Their income, age, and location all play a role in their viewing preferences and spending behavior.

More affluent viewers with higher levels of disposable income are more likely to be attracted to a subscription-based model, while older or lower income users are more likely to prefer ad-based services. Viewers in some regions such as the US are also much more willing to accept ads than others.

The type of content being shown also helps determine which model works best. Exclusivity and high-profile series help justify a subscription, live events and blockbuster film releases can work well with TVOD/PPV, while repeat content and more casual viewing works better on ad-funded services. Viewers may well be happy to pay for one or two subscriptions for premium content then prefer to add some AVOD or FAST services to the mix for more relaxed viewing and to access old favorites.

Squeezing More Juice
There’s an underlying problem in the video industry that at the highest level, most engaged users don’t necessarily pay any more than low engagement users. By enabling providers to offer new types of monetization options on top of a free or basic subscription package, the hybrid business models that we’ve started to see emerging in the past year or two help to address this issue.

So, while services need to assess key factors such as current market and trends in consumer behavior, target audience demographics, and the type of content that will feature, to determine which business model is most suitable, it’s also important to consider which model strategy allows the maximum amount of money to be obtained from the most engaged users.

One way to do this could be to differentiate on release windows. Engaged viewers may be willing to pay extra for early release of a particular title. Another approach may be to determine release dates by pricing tiers: a viewer with a basic package is made to wait longer for new releases, while a premium package subscriber gets immediate access on the official release date.

The best way of monetizing a consumer base is to create multiple tiers that serve to maximize revenue from different user segments. This way, you can make the most money out of the consumers who are the most engaged and most interested in your service. Ultimately, monetization isn’t just about deciding which business model is best, but must also be about developing an upselling strategy. This mindset has got to be part of the long-term strategy for any video service.

Multi-Model Future
If it’s not already there, the industry is heading toward a multi-model future where video providers will need to continuously experiment with combining multiple models and strategies. If a particular method or blend of models isn’t paying off, providers will need to quickly switch tactics.

To succeed in this environment, video services will need to be flexible and modular in design. For providers willing to experiment and innovate, the blending of models opens the door to a more sustainable and profitable future.

SAN JOSE, Calif.—Roku is making a notable push to expand its potential revenue streams with the launch of a new SVOD service called Howdy that will feature more than 10,000 hours of programming from such companies as Lionsgate, Warner Bros. Discovery and FilmRise. Priced at $2.99 a month, the ad-free service will also offer select Roku Original titles.

The service is launching in the U.S. on Aug. 5 with such titles as “Mad Max: Fury Road,” “The Blind Side,” “Weeds” and “Kids in the Hall,” as well as iconic rom-coms, medical dramas, ‘90s comedy, feel-good classics, and more, the streaming platform said.

“Priced at less than a cup of coffee, Howdy is ad-free and designed to complement, not compete with, premium services,” Roku Founder and CEO Anthony Wood said. “We’re meeting a real need for consumers who want to unwind with their favorite movies and shows uninterrupted and on their terms. Howdy is a natural step for us at Roku, extending our mission to make better TV for everyone, by making it affordable, accessible, and built for how people watch today.”

“We’re excited to continue our longstanding collaboration with Roku on innovative ways to connect with audiences,” Lionsgate President of Worldwide Television Distribution Jim Packer added. “With engagement of over 125 million people a day, Roku is the perfect partner to launch a more accessible complement to the higher-priced SVODs. This service has the ability to scale quickly while providing us with a new way to monetize our content, and we’re proud to be part of this new streaming experience.”

The launch is a notable diversification of Roku’s revenue streams, which have traditionally been heavily dependent on advertising and ad-supported services like The Roku Channel.

“While Roku’s platform revenues have always included fees from subscription services it helps others sell on its platform, it moved decisively into its own streaming services in 2025,” analysts at LightShed partners wrote in a note to investors. “In May 2025, Roku acquired a small vMVPD, Frndly, and today it launched a $2.99 ad-free subscription service called Howdy. Howdy appears to be an ad-free version of some of the catalog content you would find on The Roku Channel.”

“With Roku now using its home screen to promote content (vs. its legacy of app icons only), it has the ability to drive content discovery,” the note continued. “By adding owned and operated subscription services, Roku has an increasing number of ways to monetize the traffic it directs from its home screen: drive users to The Roku Channel (which monetizes through advertising), drive to its subscription services, Frndly and Howdy, drive to third-party apps where it may or may not take a cut of ads and/or subscription fees and drive transactional pay-per-view. While it is still very early days for Roku’s subscription push, we believe diversifying its revenue streams will make for a more compelling long-term investment story to investors.”

For more information or to sign up, visit howdy.tv.

LONDON—A new survey puts a spotlight on the streaming behavior of 18-to-34-year-olds finds those viewers pay more for content than other age groups, but are more likely to churn if they fail to get what they crave, according to Ampere Analysis.

The Ampere study described the demographic’s subscription streaming behavior as “subscribe, stack, churn, repeat” and stressed that the survey data showed that younger viewers want more from SVOD streaming platforms than they currently get.

“The growing signs of indifference among young consumers towards subscription OTT services signals a need for platforms to rethink their position,” Isabelle Charnley, consumer analyst at Ampere Analysis, said. “While viewers subscribe to more SVOD services than ever, loyalty is increasingly reserved for a select few. Many turn to social media for quick, frictionless content to avoid decision fatigue. To stay relevant, streamers must either position themselves as lean, cost-effective complements to premium services, with a clear and defined role in the content stack or elevate their core value proposition to justify a higher price point. Players must deliver deeper, more consistent value through engaging content, flexible access, and a compelling user experience that keeps audiences coming back.”

Thirty-six percent of those thinking of dropping an OTT service cited cost as a factor, Ampere found. For young people, though, the research also showed access, variety and convenience as important features in a streaming service. The study also highlighted how streaming platforms can tap into the needs and expectations of this profitable audience to earn their loyalty.

Key findings included:

• Among consumers aged 18 to 34 at risk of churning from their streaming service, 36% cited cost as a factor in considering cancellation within the next 12 months.
• But this is not simply just a cost-conscious group: They subscribe to more streaming services than their average peer (4.2 vs. 3.3) and are also more likely to rent (+29%) or buy (+15%) films and TV.
• Instead this reflects a deliberate cycling behavior—young consumers are significantly more likely to subscribe, cancel, and resubscribe to video-on-demand services depending on whether appealing content is available. More than half (58%) reported this behavior, compared to a global average of 40%.
• When it comes to loyalty among young people, social media sets the standard. While 85% of 18-to-34-year-olds use a social video service daily, only 52% return to subscription OTT platforms each day—highlighting a clear engagement gap that premium streaming services have yet to close.
• For younger viewers, value for money is not just a question of price; they want access, variety, and convenience. 41% find value from a platform they can watch across multiple device types, 40% from bingeable series and 39% from a wide range of content.

NEW YORK—New research from Nielsen’s Gracenote highlights the growing importance of sports related programming on the major SVOD services, with total sports programming growing by 7.8% in Q2 2025 compared to the previous quarter among Amazon Prime Video, Apple TV+, Disney+, Netflix and Paramount+, five of the top global subscription video on-demand (SVOD) services.

Three of those services, Amazon Prime Video, Disney+ and Netflix were the leading sports players in Gracenote's analysis, serving as home to 92% of available streaming sports programming. Gracenote defines that category as including live games, sports-related news, highlight shows and documentaries.

Warner Bros. Discovery's Max, which has a large offering of live sports, was not included in the data Gracenote made public to the media.

Overall, the total number of unique TV, movie and sports titles offered by these services increased approximately by 4,500, or 5%, from February to May according to a new Gracenote Data Hub release, which tracks quarterly content trends.

Netflix significantly outpaced all tracked services in total catalog growth during Q2, increasing available content by 18.2%. The next biggest relative gains were posted by Apple TV+ (3.7%), Amazon Prime Video (3.2%), Disney+ (1.6%) and Paramount+ (1%). Currently, Netflix offers 20.1% of the TV shows, movies and sports programs available on major streaming services, up from 17.9% in the previous quarter.

At the program level, the five top SVOD services grew sports content by 7.8% in Q2. This was almost 2 times the rate of movie expansion and nearly one percentage point more than the rate of TV expansion.

In terms of other content types, TV programs were up 6.9% across all tracked services while movies were up 4%.

"In the big picture for SVOD, overall content volume continues to rise but the CTV apps making this content available continually shift," said Bill Michels, chief product officer at Gracenote. "Regardless of program type or any other attribute, effective content discovery helps streamers connect viewers to the entertainment they'll enjoy most and get the most value out of each of the assets in their catalogs."

The Gracenote Data Hub provides interactive visualizations of SVOD content volume, program genre and mood trends as well as exclusivity and country of origin insights. Tapping industry-leading Gracenote Global Video Data covering content in 35 languages and more than 80 countries, the Data Hub helps video services, content owners and advertisers develop smart content distribution, licensing and media buying strategies.

More information is available at Gracenote.com.

A new Horowitz Research survey indicates companies offering TV, pay TV, SVOD and advertising-supported streaming services need to develop comprehensive strategies for attracting Black viewers, who are more likely to use or subscribe to a wide variety of video services than the general population.

The Horowitz survey indicates that Black audiences over-indexe for MVPD subscriptions (46% of black consumers have a subscription versus 44% for the total market); SVOD subscriptions (86% compared to 81% for the total market), virtual MVPDs like YouTube TV; (34% compared to 23% for the total market); and free streaming services (80% compared to 70% for the total market.)

African-American viewers were less likely to have an antenna for free over-the-air reception, with 17% of Black consumers accessing OTA channels compared with 19% for the total market.

The “State of Media, Entertainment, and Tech: Viewing Behaviors 2025” and “FOCUS Black Volume 1: Subscriptions 2025” studies also showed significant changes in how Black audiences access video. During the last five years, the percentage of Black consumers who could access TV channels via an antenna fell from 40% in 2020 to 17% in 2025, and those with a MVPD subscription fell dropped from 82% to 46%.

Meanwhile, the share of African Americans who accessed free OTT streaming services rose from 57% in 2020 to 80% in 2025, as the take-up of SVOD subscriptions rose from 72% in 2020 to 86% in 2025 and the share of viewers with a vMVPD subscription rose from 29% to 34%.

Data also showed that 10 years ago, in 2015, only 5% of Black households relied solely on streaming and 44% relied just on MVPD subscriptions. Today, 47% of viewers in the demo rely solely on streaming and only 5% exclusively on MVPDs.

More information is available here.

DALLAS—Ad-supported subscription-based streaming services will increase in popularity over the next four years, reaching 278 million viewers by 2029 according to Parks Associates.

With Nielsen’s estimates of 315 million TV viewers nationwide (representing almost 97% of U.S. households), this means more than 88% of TV viewers will be watching ad-supported SVOD.

The rise in adoption of ad-based services creates a foundation for additional revenues as well as opportunities to engage viewers in new ways through more interactive and personalized experiences, Parks says. Shoppable features and direct transactional opportunities can turn social and video content into a more direct sales channel, blurring the lines between entertainment, content consumption, and e-commerce.

"Industry players can take productive steps today to advance the interactive TV experience for viewers and advertisers by connecting workflows, making effective use of available data, and optimizing user experience elements for interactivity," said Jennifer Kent, Vice President, Research, Parks Associates. "Success involves building sustainable, scalable solutions for the long term rather than quick, band-aid solutions that address only immediate challenges."

A new white paper Interactive & Shoppable TV: Next Wave of CTV Revenues, released in partnership with Adeia, focuses on the service provider opportunity to advance the consumer experience and build on expectations of interactivity and specifically engage in commerce through the TV. It highlights consumer interest, use, and preferences for interactive features across TV and mobile viewing devices and platforms, including shoppable advertisements.

Research highlights include high demand for commerce and advertising in CTV:

• 52% of US internet households are likely or very likely to perform at least one commercial activity through a CTV platform.
• 82% see streaming ads through a combination of free streaming services, ad-based tiers of subscription streaming services, and vMVPD services that feature ads as part of their live/linear bundles of channels.
• 59% subscribe to an ad-based tier of an SVOD service, like Netflix, Disney+, or Peacock.
• 47% watch free ad-based streaming services, like Tubi, Pluto, and The Roku Channel.
• 22% watch streaming pay-TV services, vMVPDs, like YouTube TV, Hulu + Live TV, or Philo.

NEW YORK—A new report from Nielsen’s Gracenote highlights the ongoing shift of sports content to streaming services with data showing that the streaming industry’s leading global subscription video on-demand (SVOD) services, Amazon Prime Video, Apple TV+, Disney+, Netflix and Paramount+, have significantly grown their sports programming over the last quarter.

These five providers collectively increased sports programs by more than 72% in the recent quarter, underscoring the value of sports as a driver of live, real-time viewership and critical component of their content strategies, the researchers found.

The new data is from an update of the Gracenote Data Hub. Since the first Gracenote Data Hub release in October 2024, sports programming, including exclusive NFL games, WWE RAW events, U.S. Open tennis tournament matches and more, has become increasingly available across streaming platforms.

Notably, four of the five SVOD services tracked by Gracenote have bolstered their sports programming, led by Disney+ and Netflix, with increases of 471% and nearly 100%, respectively. While Apple TV+ did not increase its sports content in the recent quarter, that will change as the new MLS and MLB seasons get underway and live games air on the service.

“Live sports programming continues to be an important driver of user growth, retention and engagement for streaming services,” said Bill Michels, chief product officer at Gracenote. “We are also seeing that relevant metadata, such as synopses, scores, highlights and imagery have the power to help streamers build world-class user experiences that keep users engaged beyond the live game.”

The data also showed that on a quarter-over-quarter basis, these services have added 6.7% more content to their catalogs, with increases of 5.4% and 7.6% for TV and movies, respectively.

Other highlights from the data include:

• The increase in content across global SVOD services includes approximately 3,000 movies, 2,000 TV shows and 500 sports shows.
• A dramatic increase in sports programming on Disney+, largely the result of adding select ESPN programming, has shifted the distribution of sports programming across the five services.
• Disney+ now accounts for nearly 33% of available sports programming, just behind Amazon (35%), which previously distributed 54% of sports programming.
• Netflix accounts for just over 23% of sports programming.
• Overall, Amazon Prime Video remains the largest distributor of video content, offering nearly 69% of the available programming, up from 67.8% in Q1 2024.
• An increase in French content and a notable decrease in content produced in India on Disney+ has made France the third-biggest producer, accounting for 5.6% of the total.
• Drama remains the top genre across the five services, but it has dropped from the No. 1 position on Disney+, where it has been overtaken by documentary, comedy, children and adventure.

Gracenote program metadata covers more than 40 million titles in 260+ streaming catalogs in 35 languages and 80+ countries. The same metadata that powers the user experiences of the world’s biggest and most innovative TV providers also enables data-driven decision-making to help content distributors and owners succeed amid rapid change. The Gracenote Data Hub is updated quarterly and future releases will include data from other segments of the TV ecosystem.

DALLAS—An increasing number of U.S. internet households are characterizing themselves as “cord cutters” according to Parks Associates' latest research from its Video Services Consumer Insights Dashboard.

According to the report, 56 million (46%) of U.S. internet households are “cord cutters,’ while 12 % are “cord nevers,” who have never subscribed to any sort of traditional pay TV.

The Dashboard research service tracks adoption trends and shifts in the video services market, including households who are disconnecting in favor of free-to-air broadcasts or online video services.

Service providers are adapting by offering competitive pricing, bundling options, and hybrid monetization strategies. The rise of ad-supported video-on-demand (AVOD) and free ad-supported streaming TV (FAST) services shows the demand for lower-cost alternatives, and subscription-based platforms continue to experiment with tiered pricing and content exclusivity to retain customers.

"Cord Nevers represent a unique opportunity for streaming providers," said Jennifer Kent, Vice President, Research, Parks Associates. "By definition, this segment of the market has not paid for traditional pay TV, but streaming services have found a way to monetize a segment that has not previously valued subscription video or has grown up in a streaming-first market, with different conceptions of what subscription video should be."

For leading streaming services, many consumers prefer the basic tier with ads over the more expensive premium tier with no ads; as of Q3 2024, 59% of subscriptions across the eight leading SVOD services are basic tier with ads subscriptions:

• MAX (formerly HBO)
• Netflix
• Disney+
• Discovery+
• Paramount+
• Prime Video
• Hulu
• Peacock

To achieve profitability and strike a balance for consumers, many of the most popular services now operate under a hybrid model, offering both ad-free and ad-supported plans to viewers. Ad-based tiers are cheaper for consumers and more profitable for businesses, making them a win-win for both parties, according to the researcher.

"Consumers are worn down from continued spending increases in streaming, while years of high inflation are driving consumers to pare down accordingly," Kent said. "This only intensifies the competition among streaming vendors and will fuel more growth of subscription tiers with ads and free ad-based services."

NEW YORK—A major new study from TVB shows that most Netflix, Disney+ and Max subscribers don’t see advertising, while broadcast TV reaches 91% of streamers—including those who subscribe to ad-free platforms.

In more specifically highlighting the enduring importance of broadcast to advertisers, the survey found that 61% of Netflix subscribers, and more than half of Disney+ and Max subs, do not see advertising.

TVB, the trade association of America’s local broadcast television industry, commissioned the research company GfK to conduct its 2024 SVOD study, a 4,000-respondent survey.

The study was designed to explore ad-supported versus ad-free streaming subscriber trends, the viewership of ads on SVOD platforms and whether these streaming subscribers are also watching linear TV.

Key findings from this study showcase the value linear TV continues to deliver for advertisers seeking to reach consumers, the TVB reported. Those key findings include:

• TV is the device most used to stream and view content, even for Apple TV+.
• 86% of the survey’s respondents have at least one SVOD service.
• 61% of Netflix subscribers, and more than half of Disney+ (53%) and Max (57%) subs, do not see advertising.
• 74% of YouTube viewers who see advertising either skip the commercial when available or, if not available, click away from content.
• 58% of respondents subscribe to Amazon Prime Video, but only 4% subscribe exclusively to the Prime Video service, and not Amazon Prime.
• 50% of those on Amazon Prime Video’s ad-tier stated that they have Amazon Prime Video mainly because they subscribe to Amazon Prime.
• Broadcast assets reach 91% of SVOD viewers. This also applies to those who subscribe without advertising.
• Local TV news is the most trusted news source and local TV news websites/apps are the most trusted digital source.

NEW YORK—Carnegie Hall’s video-streaming channel, Carnegie Hall+, said it will celebrate the holiday season by offering a wide selection of holiday-themed operas, ballets, concerts and films.

“Carnegie Hall+ opens a window to viewers to some of the world’s most thrilling artists and arts venues, representing the best in performing arts programming” Clive Gillinson, Carnegie Hall’s executive and artistic director, said.

Carnegie Hall+ costs $7.99 per month. It is currently available as an add-on subscription channel on the Apple TV app, Prime Video Channels, Spectrum, Xfinity, Xumo, Verizon Fios, Cox Communications, Dish, Sling TV and Astound Broadband.

The streaming service described the featured programming as follows:

• "Silent Night: A Song for the World", a heartwarming documentary, now streaming exclusively on Carnegie Hall+. Hosted by Hugh Bonneville and directed by Hannes M. Schalle, this captivating film celebrates the creation and enduring legacy of “Silent Night,” one of the world’s most cherished Christmas carols. Featuring brand new performances and intimate reflections from renowned artists including Kelly Clarkson, Joss Stone, David Foster, Josh Groban, Rolando Villazón and the Vienna Boys Choir, amon others, the documentary explores the global impact of the song, as it is performed in renditions in multiple languages, as well as its profound cultural significance.
• Four distinct productions of Tchaikovsky’s “The Nutcracker,” illustrating the beloved ballet’s versatility and enduring appeal for adults and children alike. The splendid Vienna State Ballet revives the brilliant 1967 choreography of Rudolf Nureyev, a favorite among European ensembles because of its technically demanding footwork and balances. Also featured is Dresden’s Semperoper-Ballett, with staging by Aaron S. Watkin and choreography by Watkin and Jason Beechey in a production that draws inspiration from the picturesque landmarks of Dresden; and a concert performance conducted by Semyon Bychkov with the Royal Concertgebouw Orchestra, Children of the National Children’s Choir and The National Boys Choir, putting Tchaikovsky’s vivid musical score at the forefront. At its premiere in 1892, Tchaikovsky presented The Nutcracker alongside his opera, Iolanta. In a fourth Carnegie Hall+ presentation, Omer Meir Wellber leads an imaginative production staged by the Volksoper and Vienna State Ballet that weaves these two works together into an enchanting whole.
• A staged production of Handel’s magnificent oratorio, “Messiah,” performed in the historic Baroque gardens of South Bohemia’s Český Krumlov Castle, a UNESCO World Heritage site in the Czech Republic. Staged by Tomáš Ondřej Pilař, the production includes a hundred and fifty chorus singers dressed in replicas of baroque costumes, conducted by David Svec and featuring soloists Markéta Klaudová, Markéta Cukrová, Marek Žihla, and Roman Hoza. Complementing this, Carnegie Hall+ is also thrilled to present “Der Messias,” experimental theater director Robert Wilson’s spectacular staging of Handel’s Messiah utilizing Mozart’s seldom-heard arrangement of the landmark work. The production features the period-instrument ensemble Les Musiciens du Louvre, Philharmonia Chor Wien, and soloists Alexis Fousekis, Elena Tsallagova, Wiebke Lehmkuhl, Richard Crof, and José Coca Loza.
• “Christmas in Vienna at St Stephen’s Cathedral,” in which the Vienna Symphony, Vienna Boys’ Choir and selected soloists, led by French conductor Fabien Gabel, perform festive works by Johann Sebastian Bach, Handel, Berlioz, and more, all in the awe-inspiring setting of Vienna’s St. Stephen’s Cathedral.
• “Sting: A Winter Night,” offering songs and carols that capture the reflective spirit of winter and the holiday season, presented in the majestic, 1,000-year-old Durham Cathedral, located in the North of England near where rock star Sting grew up.
• “The Christmas Tree Concert,” with Martha Argerich and Daniel Barenboim performing a festive 2017 program for four-hands piano featuring Liszt’s rarely-heard suite of Christmas carol arrangements and delightful French works: Bizet’s “Jeux d’enfants” and Ravel’s “Ma mère l’Oye.”
• “Puccini’s La bohème,” filmed in July at the Arena di Verona, staged by Alfonso Signorini and featuring soloists Juliana Grigoryan (Mimì) and Vittorio Grigolo (Rodolfo). Set in Paris on Christmas Eve, this classic opera has become a favorite holiday tradition for music lovers each year.

DALLAS—Amazon’s Prime Video remains atop Parks Associates’ annual list of the 10 most-popular U.S. streaming services for the third straight year. Parks bases the chart positions on estimated numbers of subscribers through September 2024 from the firm’s Streaming Video Tracker.

The two streaming leaders maintained their market position from 2003, with Prime Video in the top position above Netflix. Parks Associates said 88% of all households have a streaming service and 42% now use ad-based services, “creating incredible competition for subscription streaming services.”

This year’s top 10 list shows Disney+ taking the third position and pushing Hulu to No. 4. Peacock cracked the top five for the first time, jumping ahead of Max and Paramount+. YouTube Premium held onto its 10th position.

“Tracking the changes at the top of the market over the past five years reveals the extent of rebranding and consolidation shaping this market,” Parks Associates VP, Research Jennifer Kent said. “Showtime, which was in the top 10 back in 2020 and 2021, no longer exists as a standalone SVOD service and is now a premium add-on tier for Paramount+. We expect to see more premium content used to differentiate subscription tiers or create content bundles, giving consumers choice in how to build their packages.”

The chart positions don’t necessarily jibe with budgets, though, with Peacock parent Comcast NBCUniversal spending an estimated $22 billion, followed by Prime Video at $21.5 billion, Netflix at $19.5 billion and Disney at $18.5 billion, according to Filmtake.

As streaming services struggle to boost profits by raising prices, a new Parks Associates study has found more streaming consumers are opting for basic tiers with ads over more costly, ad-free premium tiers.

Overall, the Parks survey found that ad-based tier subscribers account for 57% of the user bases of the eight leading streaming services, even though those subscribers complain about poor user experiences with long ad breaks and about seeing the same commercials far too often.

“Ad-Based Streaming: Consumer Demand & Engagement,” a Quantified Consumer study of 8,000 U.S. internet households, examines why ad-based services are experiencing a surge in adoption, gauges which services are the most popular and examines household sentiment towards the ad-based experience.

The research reveals that on average, ad-based tier subscribers account for 57% of the user bases of the eight leading streaming services: Max, Netflix, Disney+, Discovery+, Prime Video, Paramount+, Hulu and Peacock, according to Parks Associates’ consumer survey work.

“Many video streaming services, needing to boost profits, continue to raise prices and have rolled out ad-supported plans to give subscribers options,” Parks Associates Research Analyst Sarah Lee said. “In many cases, these ad-based tiers are more profitable for businesses, adding urgency to the need to improve the ad experience for their subscribers.”

While cost is an important factor, the researchers stress that the embrace of ad-supported video-on-demand (AVOD) services goes beyond just saving money. Roughly one-fourth of current AVOD subscribers have adopted this tier to save money, while a similar share of subscribers were attracted by a bundle or a promotion. Additionally, many consumers see the low-priced ad tiers as a low-risk way to try a new service or re-subscribe to one they churned away from.

The Parks research also shows that the end-user experience needs improvement. Users commonly report that the same ads repeat too many times, ad breaks are too frequent and long and the content stops but no ads are shown.

“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 and the ad revenue that comes with it,” Lee said.

Parks Associates will share this and additional streaming video consumer research at its upcoming Future of Video: Business of Streaming conference, Nov. 19-21 at the Marina del Rey Marriott in Marina del Rey, California.

NEW ROCHELLE, N.Y.—As streamers and content distributors work to attract new subs in an increasingly competitive media landscape, a new study from Horowitz Research highlights the importance of in-language and international content in attracting rapidly growing Asian American audiences. 

The new study, FOCUS Asian Volume I: Subscriptions 2024, reports that Asian Americans say that in-language and international content is an important consideration when making subscription decisions. 

It also found that more than half (54%) of Asian audiences watch at least some Asian-language content at least occasionally, and over 4 in 10 say content from their country of origin or heritage (45%) and/or international content (44%) is valuable for them. 

For nearly 2 in 3 (64%) Asian-language dominant and bilingual Asian TV content viewers, content in an Asian language or geared toward Asian audiences is critical to have when considering which services to subscribe to for entertainment content.

These new data from Horowitz underscore the opportunity for streaming platforms to expand their offerings of original Asian-themed content. Like other consumer groups, Asian households continue to cut the cord to traditional cable/satellite services (MVPDs) while streaming adoption and usage continues to grow. 

In line with the total market, 2 in 3 (67%) Asian households subscribe to at least one SVOD, with an additional 10% who have access without a fully paid subscription (e.g., password sharing or bundling). While Netflix and Amazon Prime Video top the list of most-used subscription streaming services among Asian viewers, Asian-targeted SVOD services like Rakuten VIKI, OnDemandKorea, and ZEE5 that offer in-language content also play a role in viewership for Asian audiences, especially among less acculturated viewers.

Notably, usage of free, ad-supported TV (FAST) services has seen a 50% increase among Asian audiences, from just 23% reported in the 2019 study to 73% today (higher than 67% of the total market). 

Among Asian-language dominant viewers specifically, over 8 in 10 (85%) use FAST channels. The top free streaming services among Asian viewers are YouTube and Tubi; Asian audiences are also more likely to use Samsung TV Plus and XUMO than consumers overall, the study found. 

“Asian audiences have long been avid streamers and, in fact, were early adopters, finding ways to stream in-language and international content many years before streaming became commonplace since it was harder to access this content through traditional means,” notes Adriana Waterston, executive vice president and Insights & Strategy Lead for Horowitz Research, a division of M/A/R/C Research. “FAST is, therefore, a natural fit for Asian viewers, expanding opportunities for advertisers looking to reach these desirable audiences through these ad-supported streaming platforms.”

The importance and value of content for diverse audiences will be a key focus of the upcoming Cultural Insights Forum, Horowitz’s renowned conference which is coming back in fall 2024 after a 6-year hiatus. The Forum, focused on how brands and media companies can drive ROI by reaching and serving America’s diverse, multicultural, and intersectional audiences, will be hosted on November 14, 2024, at Telemundo Center in Miami. Register here: https://culturalinsightsforum.com 

Global SVOD revenues will increase by $116.6 billion by 2031, a growth rate of 13.3% per year over the next eight years, according to a new report from MIDiA Research. Cumulative revenue is expected to rise from $109.6 billion in 2024 to $226.2 billion in 2031. 

MIDiA says the majority of this revenue growth will come from older consumers (so-called “silver streamers” 55+) reluctant to cancel subscriptions despite price increase.

Despite this conclusion, MIDiA’s report  "2024-2031 Global Subscription Video Forecasts" also recommends SVOD providers use ad-supported models to engage and retain younger viewers, “creating a pipeline for future subscription upgrades as these viewers' financial situations improve.”

The report also concluded that the SVOD market will experience revenue growth that significantly outpaces the increase in subscriber accounts, indicating a shift towards a more mature and sustainable market model over the next eight years. In addition, cumulative revenue growth over the next eight years will be double that of unique account growth, reflecting the increasing efficiency in monetization within the sector.

"Younger entertainment consumers are facing unprecedented pressure on their already low spending power. Millennials and Gen Z have also been educated by social media platforms to expect a range of free content supported by advertising or brand partnerships," said Ben Woods, video analyst at MIDiA Research. "SVOD services risk losing engagement to the social video platforms if they fail to create offers that truly cater to younger viewers. Widening the funnel even further through free-ad supported streaming TV channels that do not require a subscription would give SVOD services a better chance of turning these cash-poor consumers into tomorrow's subscribers."

DURHAM, N.H.—While streaming video services like Netflix have worked to rein in password sharing, a new study from Leichtman Research Group (LRG) reveals nearly one-quarter of all the direct-to-consumer VOD streaming services measured are being shared by more than one household.

“Password sharing continues to be prevalent throughout the streaming video industry, despite recent efforts to limit it. This study found that 10% of all DTC services are borrowed from someone else, down from 12% in 2022,” said Bruce Leichtman, president and principal analyst for LRG. “Overall, 20% of households have at least one DTC service that is paid for by another household.”

Published in LRG’s new “Internet-Delivered TV Services 2024” study, its seventh annual, the research focuses on vMVPDs (virtual Multichannel Video Programming Distributors) and other DTC streaming video services.

On the plus side for service providers, of the households that subscribe to the 15 top DTC video-on-demand services LRG measured, 53% have signed up for four or more services. Nearly three out of four of them fully pay for those services and do not share them with those outside their households, the research found.

The study reveals that among the 23% of all DTC services used by more than one household: 11% are used and paid for by those who also share the with someone outside their home; 10% are used in one household but borrowed from another household paying for the service; and 2% are used by multiple households that share costs, it found. 

The research also found 4% of DTC services are not paid for because they are bundled with another service.

Subscription borrowing was more prevalent among younger respondents. A total of 17% of all DTC services are borrowed by those ages 18 to 34, compared to 7% among those 35 and older. The younger cohort accounts for 59% of all DTC services borrowed by an adult, according to the findings.

The efforts of Netflix to combat service borrowing appear to be paying off as just 10% using the service borrow it from someone else—down for 15% in 2022, it found.

Other findings of the research include:

• Among adults ages 18-44, the mean number of DTC services is 5.1, compared to four among ages 45-54, and 2.8 among those 55 and older.
• 6% of all households in the past year had Netflix, but currently do not—the is true for Hulu and the live pay-TV category.
• Adults 18-to-44-year-old adults account for 57% of all those with a vMVPD pay-TV service.
• 72% of vMVPD subscribers are very satisfied with their service, which is down from 79% in 2022.
• 22% of all vMVPD services are shared by multiple households, including 8% of all vMVPD services that are fully paid for by someone outside the household.

The findings are based on an online survey of 2,546 U.S. adults 18 years of age and older. It was conducted in February, and the online sample has a statistical margin of error of +/- 1.9%. 

More information is available on the company’s website. 

A new research report from Antenna is confirming the widely held perception that the streaming business is entering a more mature phase with growth slowing and fickle consumers becoming more likely to cut services. 

The State of Subscriptions report from Antenna found that the SVOD industry grew by a healthy 10.1% in 2023, a growth rate that some media like broadcast TV would love to see. But that was less than half the growth seen in 2022, when subscriptions rose by 21.6%. 

The study also found that streaming companies were working harder for less growth. Antenna’s Weighted Average Churn reached 5.5% at the end of 2023, up 0.8 percentage points from the year prior. In 2023, the industry saw an increase of 19.3 million more gross additions than 2022 but there were 36.2 million more constellations than 2022, which translated into 17.0 million fewer net additions and slower growth. 

“Antenna sees the streaming video category entering a new era,” the researchers wrote in the report. “The previous stage was hyper-focused on acquisition – which made sense, as these new brands had to establish a mass audience. But now that the largest players have that scale (and the niche players have introduced themselves to their target audiences), they must shift their focus to managing their Subscribers.”

Total subscriptions were 242.9 million at 2023 with Peacock, Paramount+, and Netflix driving the most sub growth in 2023. Nexflix had 26% of all subscriptions, holding its share for the first time since 2019.

In addition to finding that the churn rate has almost tripled in four years, the data highlighted some important facts about those churners. 

Nearly a quarter (23%) fall into a category Antenna calls Serial Churners who have 3+ cancellations of a Premium SVOD Service in the past two years, up from 17% in 2022. 

Their data also found that 42% of Serial Churners have canceled a premium SVOD Service 5+ times in the past two years, and 19% have Canceled 7+ times. 

The study also found that many people are resubscribing, making win-backs an important strategy, with weighted average resubscribe rate increasing to 30.1% in 2023.

Serial Churners are also an increasingly important target for acquisition strategies, the study found. Serial Churners accounted for all of the growth in acquisition in 2023, driving 60.0 million gross additions in 2023, up +36.2% YoY. In contrast, gross additions by Non-Serial Churners fell -2.0% YoY to 99.5 million, the report found. 

The full report can be found here.  

NEW YORK—Carnegie Hall has announced that Carnegie Hall+, its performing arts streaming service, is now available on Prime Video Channels in the U.S. 

Carnegie Hall+ is a premium subscription channel featuring concerts, operas, dance, films, family programs, and more for on-demand viewing on the Apple TV app, Prime Video Channels, Spectrum, Verizon Fios, DISH, Sling TV, and Astound.  

Curated by Carnegie Hall from an array of new and historic presentations, Carnegie Hall+ offers front-row access to exceptional performances from the world’s most renowned stages.

"We are very excited to be amplifying the reach of Carnegie Hall+ and making the channel's remarkable programming available to more and more people across the country," said Clive Gillinson, Carnegie Hall's executive and artistic director. "Carnegie Hall+ represents the best in performing arts programming, featuring both new and historic presentations and showcasing many of the finest artists from around the world, all at an affordable price. When watching the channel, subscribers can journey to the Salzburg Festival in Austria, the BBC Proms in London, or watch the Vienna Philharmonic perform in the Golden Hall of the Musikverein in Vienna, plus much more. Hundreds of hours of programming have been specially curated with all arts lovers—from casual viewers to aficionados—in mind." 

The subscription service costs $7.99 per month. More information is available at https://www.carnegiehallplus.com/. 

A new survey from TransUnion indicates that Gen Z consumers are the most fickle generation when it comes to streaming subscriptions with 30% of them canceling more than one service in the last six months and another 30% telling researchers they had canceled one service. 

That was lower than all respondents to the TransUnion survey, which found that 24% of consumers had canceled on service and 15% had canceled more than one. About 32% of millennials had canceled one service and 18% had canceled more than one. 

Only 31% of Gen Z consumers said they had not canceled a service in the last six months, compared to 47% of all respondents and 40% of millennials. 

The most common reason for canceling were price hikes, with 52% of all respondents, 43% of Gen Z and 53% of millennials saying they got rid of a subscription service after it increased pricing. 

Other common reasons for canceling were finishing a movie or TV show they could only get on the service (29% of all respondents), when they felt the service wasn’t adding new content (28%) and when they were given access to another person’s login credentials (17%). 

There were also notable differences among age groups in terms of ad supported services. About one third (34%) of all respondents, 29% of Gen Z and 40% of millennials said all their subscription services had ads while 51% of Gen Z, 46% of millennials and 44% of all respondents said some of their services had ads. Only 14% of millennials, 21% of Gen Z and 22% of all respondents said that none of their subscription streaming services had ads. 

The online survey of 3,000 adults aged 18 and older were conducted between Sept. 27 and October 2023. Gen Z includes people born 1995–2005; Millennials are those both 1980–1994. 

As more companies shift towards offering ad-supported streaming tiers, the presence of ads on streaming services remains a deeply polarizing subject. 

A significant majority of consumers (59%) say they would be willing to watch ads if it saves them $4 to $5 a month in subscription fees while large numbers of streamers (41%) say they would pay an extra $4 to $5 a month to avoid ads, according to the June survey by Hub Entertainment Research. 

The number is up slightly from the 57% willing to endure ads to save money in December of 2022 but is remarkably similar to the 58%/42% split two years ago in the June of 2021 survey. 

That would indicate attitudes towards advertising on streaming haven’t undergone a notable shift since companies began making advertising a major part of their streaming strategies in the hope of staunching large streaming losses. 

The survey also found that a significant number of consumers who had settled on subscribing to a tier with ads subsequently decided to go back to an ad free tier. 

The June Hub survey found that more than one in four streaming subscribers had switched between ad-free and ad-supported tiers and that 60% of those who switched moved from an ad-supported tier to the ad free option. 

In contrast, 46% of those who switched reported that they had downgraded from an ad-free tier to an ad-supported tier.

Among the switchers, 39% said they’d moved to an ad-free tier because there were too many ads and 36% said they’d moved to an ad-supported option to save money. 

About one third of those surveyed (33%) said they hadn’t switched because they wanted to avoid ads. But more than one quarter (27%) said they would switch to an ad-supported option if they could save 30% to 50% of their subscription price. 

The amount of ads was also a significant issue. The survey found that the tipping point for consumers considering whether a service offered a “reasonable” ad load was 11 ads per half hour and ad breaks that were longer than 90 seconds. 

More information is available here. 

Just as movie theaters were trying to recover the effects of pandemic closure, a cost-of-living crisis tipped the scales in favor of in-home entertainment. Studios must once again retool licensing and distribution strategies to reach consumers.

U.S. studios have doubled down on SVOD initiatives since beginning to experiment with new release opportunities during the pandemic. Disney+ did so with PVOD, allowing users to rent select movies day-and-date with their theatrical release, while HBO Max (now known as "Max"), simply made many of its high-profile theatrical releases available to stream day-and-date.

The Status Quo Long Gone
Comparing pre-pandemic and post-pandemic first window buyers reveals a stark departure from the long-established status quo. Between 2019 and 2022, the number of streaming services in the US that premiered major studio movies within one year of theatrical release doubled. The number of premieres jumped from 82 to 91, according to 3Vision.

Warner Bros. Discovery continues to be the first window home for most major studio movies in the US. Titles once limited to HBO now typically appear on its Max streaming service as well. Overall, Warner Bros. Discovery airs far fewer movies from competing studios than it did before the rise of studio SVODs, apart from standing deals such as the Warner/Disney agreement to air 20th Century movies first on HBO alongside Max in the US.

Many of the newer service owners buying major studio movies in the US are supported by their own vertical integration. While Paramount’s Showtime has long been a first window home for many high-profile indie movies, its pre-pandemic acquisition activity from major studios was limited (with Paramount rarely engaging in vertical integration). 

This strategy has changed since the launch of Paramount+, with the SVOD taking most Paramount movies in the first window in 2022. Paramount’s CEO, Bob Bakish, claimed the decision to bring "Top Gun Maverick" to Paramount+ served as a major boost to the service’s subscribers in the US and abroad.

The same is true for NBCUniversal and Peacock. The studio is now more likely to license its movies to HBO or Netflix than before the pandemic, although Universal Pictures’ recent slate has been sizeable enough to split between supporting Peacock and selling to third parties to drive more external licencing agreement revenue.

One of the biggest changes is the output of MGM. The studio that previously focused its sales to Hulu is now going either directly onto MGM+ (FKA EPIX) or Amazon Prime, following Amazon’s acquisition of MGM.

The only studio seemingly uninterested in supporting its own service is Lionsgate, undoubtedly due in no small part to its continued efforts to find a buyer for Starz. This of course will always be a more attractive proposition to prospective acquirers if Starz is not wholly reliant on its relationship with Lionsgate to find content. 

What it has allowed Lionsgate to do is adopt the traditional Sony ‘arms dealer’ approach: licensing movies to several different services, including other first window newcomers like FOX, AMC+ and The Roku Channel.

While studios have pivoted, the U.S. licensing market has yet to land firmly in a new normal. Ongoing market flux will require studios to scrutinize data, as both buyers and suppliers, to a greater extent than ever.

Vertical Integration on a Global Scale
The rollout of studio owned SVOD services has also affected the type of services buying major studio movies in the first window internationally.

In 2019, pay TV services made up 69% of major studio movie buyers. In 2022, it was only 28%.  Global SVODs such as Amazon and Netflix are now a greater share, and studio SVODs are the driving force. 2022 was the first year that they comprised the majority share of first window movie premiere buyers. Most of this was supported by Disney, which essentially went all-in on vertical integration.

Local regulations create unique dynamics in international markets. In France, for instance, any studio looking to engage in vertical integration must contend with existing legislation that prohibits movies from streaming within 36 months of theatrical release. Disney continues to licence its movies in the first window to the French pay TV service Canal+ before they can premiere on Disney+ in a later window.

Even studios without their own service are selling less to pay TV than global SVODs. While the likes of Netflix and Amazon may be acquiring less of the latest TV from third parties, they recognize the importance of big theatrical releases on their platforms. For studios like Sony, the opportunity is huge if SVODs are willing to pay a premium to acquire Sony’s biggest movies for its services across multiple international markets. In the case of MGM, the vast majority of global SVOD sales are to its new parent, Amazon.

Studio movies are more likely than ever to debut on SVOD than their traditional first window home of pay TV. The one exception is NBCUniversal. It has the highest proportion of pay TV buyers, greatly supported by the company’s own Sky group in the UK, Germany and Italy. In the instance of NBCUniversal, vertical integration is helping keep the traditional pay TV window open.

Looking back at market data since 2019, two things are immediately clear: the dramatic scale of change and its resulting complexity. Looking forward, studios will need to analyze their own data with more granularity to understand how variables per market, distribution channel, and even title could impact revenue.  

A Pragmatic Content Approach
Studios are shifting to a vertically integrated SVOD model. Although it’s happening more slowly than it did in the scripted TV genre, movies increasingly serve as banners to attract subscribers and unlock streaming revenue. As streaming profitability displaces growth-at-all-costs as a priority, we may see the current breadth of third-party buyers (both in the US and abroad) remain as it is for now.

The more sudden change that studios face is a need to rapidly, constantly refine distribution strategies. The ability to granularly analyze market, distribution channel, and title-level data is critical to doing so. Expect each studio’s approach to differ more and more from the next in this new era of movie distribution.

LOS GATOS, Calif.—Netflix's password sharing crackdown helped the company report generally healthy subscriber growth for Q2, 2023 as global subs grew by 5.89 million to 238.39 million and subs in the U.S. and Canadian market increased by 1,173,000 subs to 75,571,000. 

Netflix also said the subscribers for its ad-supported plan nearly doubled from a "small membership base" since Q1 but provided no specific numbers. 

“Q2‘23 revenue of $8.2B and operating profit of $1.8B were generally in-line with our forecast—and we expect revenue growth to accelerate in the second half of ‘23 as we start to see the full benefits of paid sharing plus continued steady growth in our ad-supported plan,” the company said in a letter to shareholders. “We’re still targeting a full year 2023 operating margin of 18% to 20%. We’re a leader in terms of streaming engagement and, per Nielsen, we had the top original streaming series in the US for 24 of the first 25 weeks of 2023, and the top movie for 21 weeks.”

But Netflix shares declined in after hours trading with slower than expected revenue growth even though the company beat subscriber and earnings per share forecasts.

The company did not release numbers for subscribers to its ad-supported tier. “While we continue to grow our reach—ads plan membership has nearly doubled since Q1— it’s still off a small membership base, so current ad revenue isn’t material for Netflix,” the letter to shareholders said. “Building an ads business from scratch isn’t easy and we have lots of hard work ahead, but we’re confident that over time we can develop advertising into a multi-billion dollar incremental revenue stream.

Management also remarked on its push to attract subscribers to the ad-supported offering, noting that the ad supported tier now had about 95% of the content available in the ad free offerings.

“Increased sophistication on pricing and plans strategy is important to improved monetization,” the letter said. “In Q1, we lowered prices in a number of less penetrated markets, and in Q2, we phased out our Basic ads-free plan for new and rejoining members in Canada (existing members on the Basic ads-free plan are unaffected). We’re now doing the same in the US and the UK. We believe our entry prices in these countries – $6.99 in the US, £4.99 in the UK and $5.99 in Canada – provide great value to consumers given the breadth and quality of our catalog.

It also said that its crackdown on password sharing was helping its bottom line. “Now that we’ve launched paid sharing broadly, we have increased confidence in our financial outlook,” the company told shareholders. “We expect revenue growth will accelerate in the second half of 2023 as monetization grows from our most recent paid sharing launch and we expand our initiative across nearly all remaining countries plus the continued steady growth in our ad-supported plan (more details in the Monetization and Revenue section)."

Reduced spending on programming and other cost cutting measures also prompted the company to raise its profit margin forecasts.  

PORTSMOUTH, N.H.—Amid growing signs that the era of “peak TV” may be coming to an end, a new survey from Hub indicates that many consumers are now either at or near their maximum number of TV sources, and are not actively looking to spend more money on video entertainment.

The Hub’s annual “Monetization of Video” survey found that nearly half (43%) of those surveyed are already at what they claim is the maximum number of services they want, which is an average of seven TV sources. Among the one third of viewers who have not yet reached their limit, the survey found that seven services is also the optimal number of services. 

“The video ecosystem is clearly at an inflection point. Gone are the days when providers could reliably count on revenue growth from new subscribers,” said Mark Loughney, senior consultant to Hub. “This leads to a quandary: how to deliver the volume of content necessary to keep subscribers loyal, while at the same time controlling production costs. Reconciling this dilemma will be the key to long term success in the video marketplace.”

The good news for providers is consumers are still spending more: Nearly half of consumers (44%) say they are spending more on TV than a year ago, and that’s up from 34% who said the same in 2020. This is despite the fact their actual average spend of $85 per month is 25% more than what they consider “reasonable” for video services, the Hub survey found. 

The bad news is the highest spenders are the most likely to churn: The more subscriptions a household has, the more likely they are to cancel a new subscription within 6 months of acquiring it. The majority of those with 4 or more subscriptions say they canceled a new service within six months.

Another key finding is that consumers are looking for value: While low price is the strongest driver of the value of a particular video service, it is not the only thing consumers include when considering value. They also want price stability, and for a service to have a large library of content, the researchers said. 

The survey also found that bundling SVODs with MVPD subscriptions provides value: Among the substantial segment of consumers who do not have an MVPD subscription, two thirds say integrating SVODs into an MVPD (i.e.. traditional pay TV) set-top-box would make a Pay TV service more valuable to them (up from 59% last year). In an environment characterized by subscription churn, such bundles could serve to reduce cancellations.

These findings are from Hub’s 2023 “Monetization of Video” report, based on a survey conducted among 1,602 US consumers with broadband, age 16-74, who watch at least 1 hour of TV per week. Interviews were conducted in June 2023 and explored consumers’ attitudes toward what they pay for TV services, and the value delivered by providers.  A free excerpt of the findings is available on Hub’s website. This report is part of the “Hub Reports” syndicated report series.

SALT LAKE CITY—The parent company of the Utah Jazz NBA team, Smith Entertainment Group (SEG), has announced plans to air next season's games on Sincair’s KJZZ broadcast TV station and to launch a new SVOD service that will stream the games. 

KJZZ will have rights to games that are not being nationally televised. The games will be available for free over-the-air and on pay TV operators that carry KJZZ.

The Jazz games previously aired on Warner Bros. Discovery’s AT&T SportsNet, which is being shut down.

The move to broadcast follows a trend in major league sports as teams adapt to the cratering economics of regional sports networks that have forced some RSNs to shut down or file for bankruptcy.

As part of the plan, SEG has set up SEG Media, a new production company that will produce the games and provide access to the games through a combination of over-the-air broadcast television and a paid, subscription-based streaming service, starting in the 2023-24 NBA season.

“Our top priority has always been providing the best fan experience possible. When we first took over stewardship of the team, 39% of Utah households had the ability to watch Jazz games, so as soon as the window opened last fall for us to rethink our approach to broadcasting, we began exploring all options to provide fans the most reliable access to Jazz games,” said Ryan Smith, chairman of Smith Entertainment Group and governor of the Utah Jazz. “This new approach is one of the most important investments we have made since purchasing the team because it allows us to deliver Utah Jazz games to all 3.3 million plus Utahns.”

SEG Media is the organization’s first entry into the media and broadcast world. The new production company will produce all Utah Jazz content to be distributed on the over-the-air TV channel, the team’s digital platforms, and a new direct-to-consumer (DTC) streaming option, with future plans to service other SEG entities and external partners, the company explained. 

Starting October 2023, a new paid, Utah Jazz-branded, subscription-based streaming platform will deliver every available Jazz game, as well as other team related content.

Full details on the Jazz’s DTC offering will be announced in the coming months, SEG said. 

Utah Jazz TV broadcasters Craig Bolerjack, Thurl Bailey, and Holly Rowe will continue to call games, while Michael Smith and Alema Harrington will host the pre- and post-game TV show hosts, SEG said. 

The Jazz have granted Sinclair Broadcast Group, which owns and operates KJZZ, the rights to air all available Jazz games on the station, and fans should expect significant coverage of the team from Sinclair’s CBS affiliate in the market, KUTV (channel 2). The Jazz will also collaborate with the KJZZ and KUTV teams to distribute additional Jazz-related ancillary programming, produced by SEG Media, throughout the year.

SEG and the Utah Jazz have obtained all necessary approvals from the National Basketball Association and were advised on the new direction by Endeavor/WME Sports. Financial terms are not being disclosed.

Annual revenues of U..S subscription video on demand (SVOD) services will nearly equal those of traditional pay TV in 2027, marking a critical tipping point in the ongoing decline of cable TV, IPTV, and satellite TV services as over-the-top video streaming rises to dominate the media landscape. 

That’s the conclusion of a new report from GlobalData that predicts that revenues from SVOD services such as Netflix, Amazon Prime, and Hulu will increase from nearly $47.6 billion in 2022 to $64.6 billion in 2027, recording a compound annual growth rate (CAGR) of 6.3%.

This growth will come at the expense of traditional pay TV in the US, as the research firm estimates that pay-TV revenues will plummet from $88.5 billion in 2022 to less than $65 billion in 2027, registering a negative CAGR of 6.0%. SVOD’s household penetration, having already reached a whopping 260% in 2022 thanks to households subscribing to multiple SVOD services, will jump to 312% in 2027.

Meanwhile, pay TV’s U.S. household penetration rate will slide from 47% in 2022 to 33% in 2027, with ongoing declines registering across cable TV, broadband-delivered IPTV, and direct-to-home (DTH)/satellite TV subscriptions as the ranks of “cord-cutters” and “cord-nevers” grow unabated. Young adults who have never subscribed to cable or satellite TV make up the cord-nevers, while older users who are turning away from traditional pay TV in favor of streaming services are considered "cord-cutters."

“SVOD was already on an impressive upward trajectory, but the addition of live sports programming is changing audience viewing habits even more, helping drive additional pay-TV cord-cutting and SVOD growth. Just this month, the National Football League and NBCUniversal announced that the Peacock streaming service will air the first-ever exclusive live streamed NFL postseason game in January 2024, when it presents an NFL Wild Card Playoff. Even ESPN is reportedly eyeing a standalone direct-to-consumer (DTC) streaming version of its flagship channel.”

There is some good news for traditional pay-TV service providers, as GlobalData anticipates their monthly average revenue per subscriber (ARPS) will remain strong. US pay-TV ARPS reached $113.49 in 2022 and is expected to rise to $118.34 in 2027, thanks largely to price increases by cable TV and satellite TV providers. 

Domestic SVOD providers, meanwhile, will see low, but stable ARPS over the next few years, as the sector’s monthly ARPS of $12.16 in 2022 will increase just slightly to $12.79 in 2027. SVOD price increases will be reined in due to heated competition, as well as the increased use of ad-supported tiers, plans with limited content, and monthly and temporary discounts, GlobalData says. Additionally, as inflation moderates, there should be less pressure on SVOD providers to dramatically raise prices.

“GlobalData expects Netflix to continue to dominate SVOD revenue market share, attracting about three times as much revenue as Amazon Prime, and twice as much as Hulu (SVOD only, without live TV) each year through 2027,” Parker added. 

STAMFORD, Conn.—In a notable example of how high profile sports are moving to streaming platforms, the NFL and NBCUniversal have announced that Peacock will become the home to the first-ever exclusive live streamed NFL Playoff game.

NBCU’s streaming service Peacock will live stream an NFL Wild Card Playoff in primetime on Saturday, Jan. 13, 2024 at 8 p.m. ET immediately following a late afternoon NFL Wild Card Playoff game on NBC and Peacock (4:30 p.m. ET on Sat. Jan. 13).

The Wall Street Journal has reported that the one year deal cost NBCU about $110 million. 

"We are thrilled to partner with the NFL on this industry milestone, bringing to Peacock the first ever exclusively live streamed NFL Playoff game," said Pete Bevacqua, chairman, NBC Sports. "With America's No. 1 primetime show for a record 12 consecutive years, the terrific regular season SNF schedule revealed last week, and today's announcement, we can't wait for the 2023 season to kick off."

The news follows the announcement that this season, Peacock will be the exclusive home of an NFL regular-season game for the first time, as Josh Allen and the Buffalo Bills visit Justin Herbert and the Los Angeles Chargers in a primetime matchup of AFC playoff teams at 8:00 p.m. ET on Saturday, Dec. 23. 

The Peacock regular-season game immediately follows a special SNF Saturday afternoon game (Bengals vs. Steelers) at 4:30 p.m. ET on NBC and Peacock.

The Peacock exclusive Wild Card game and regular season game will be broadcast on NBC stations in the two competing team cities, and available on mobile devices with NFL+. The NFL is the only sports league that presents all regular-season and postseason games on free, over-the-air television in local markets.

Hans Schroeder, NFL executive vice president and COO of NFL Media added that "Expanding the digital distribution of NFL content while maintaining wide reach for our games continues to be a key priority for the League, and bringing the excitement of an NFL playoff game exclusively to Peacock's streaming platform is the next step in that strategy."

"As Peacock continues to grow, nothing says 'must-have' programming more than live NFL games," said Kelly Campbell, president, Peacock and Direct to Consumer, NBCUniversal. "With the first-ever exclusive live streamed NFL Playoff game and our first exclusive regular season game, plus the entire season of Sunday Night Football and Football Night in America, and the Peacock Sunday Night Football Final postgame show, fans can stream the best of the NFL on Peacock all season long."  

With the two Saturday NFL Wild Card games and a Sunday primetime NFL Wild Card game (on NBC and Peacock), NBCUniversal will be the first media company to present three NFL Playoff games in a single weekend (January 2024), the company noted. 

LONDON—Although it runs counter to logic, video gamers actually spend more time and money on video streaming than non-gamers, according to a new report by MIDiA Research, which cites the recent success of HBO’s TV adaptation of the popular video game “The Last of Us” to argue that SVOD companies should cater more to gamers. 

As of Q4 2022, 67% of consumers identify as gamers, spending an average of 8.8 hours per month on streaming TV shows and movies, compared to 6.9 hours for non-gamers. Gamers spend more on video streaming, with an average monthly spend of $12.60, compared to $9.50 for non-gamers. This makes gamers a disproportionately important segment in the SVOD landscape, and their preferences should be considered in the commissioning and storytelling strategies of video streaming services, the researcher said.

One of the key insights from the research is that coordinating episodic releases of TV adaptations alongside game releases, such as downloadable content (DLC) or new game seasons, can turn competition between video and games into synergy. This approach can lead to increased engagement, potential uplift in users and average revenue per user (ARPU), and better retention of gamers—the largest and most valuable entertainment segment of video streaming's user base.

MIDiA says “The Last of Us” series, produced by PlayStation Productions, has been a prime example of a successful TV adaptation that closely replicated the original game's essence, resonating with fans, and its research suggests that replicating the original game title more closely in TV adaptations can be a winning strategy due to the sheer number of gamers who now subscribe to video services.

Karol Severin, lead games analyst and co-founder of MIDiA Research, stated, "Given the value and the number of gamers among video subscribers, it makes sense to have TV adaptations of games replicate the original title more closely than ever before, as demonstrated by the successful case of ‘The Last of Us.’ Expect a lot more of this in the coming months."

Tim Mulligan, lead video analyst and co-founder of MIDiA Research, emphasised the need for SVOD services to understand their gamer user base's specific preferences to cater to them effectively.

"The overall gamer segment illustrates an opportunity for SVOD services to commission TV show adaptations of games and for the TV shows to remain closely tied to the original game” Mulligan. “However, to activate this effectively, it is crucial for SVOD services to dive deeper into the gamer preferences of their specific userbase."

The research also suggests that game developers, publishers, and distributors can benefit from increased brand awareness, engagement, and sales uplift through cross-promotion of the IP as a TV show. This can rekindle interest in older games and unlock hype for DLCs, game seasons, and in-game purchases, presenting a valuable marketing opportunity for the gaming industry, MIDiA added.

Perry Gresham, forecast and modelling analyst for MIDiA Research, commented, "Gamers are arguably the key segment for the video industry. They represent a super-majority of the user base for all primary SVOD services and eclipse non-gamers for most video consumption behaviours, including number of paid subscriptions and time spent watching SVOD.” 

Ben Woods, video analyst for MIDiA Research, said: “Gaming companies producing shows based on their IP may ultimately decide to cut out the middleman—the TV and movie studios—and make exclusive series and movies for their own subscription services.”

Sam Griffin, research associate for MIDiA Research, said: “In the peak attention era, the TV show format works. Unlike a movie, a TV show episode is much more suited to viewing on a commute, for example. It offers greater ability for games IP holders to generate incremental revenues and brand engagement—particularly important for story-driven games that do not offer in-game purchasing.”

PORTSMOUTH, N.H.—In a development that is likely to prompt renewed debate over the saturation of streaming services and video options, Hub’s annual “Best Bundle” survey shows that for the first time in five years, viewers dialed down how many video services they “stacked” in 2023. 

Consumers reported using fewer paid TV services while emerging free services saw little change, according to the HUB.

The big question is whether this is a short-term or long-term trend, the researchers said. 

After showing strong growth – doubling between 2019 and 2022, from 3.7 to 7.4 – the average number of TV sources used by viewers has dropped in 2023 to 6.4. This decrease from 7.4 to 6.4 represents a relative decline of 14%. Although the causes for the drop are varied, it is likely inflation and perceptions about the economy are the primary reasons, the researcher said. 

The data also showed declines in both traditional and streaming subscriptions. Comparisons with 2022 data show fewer viewers report having a streaming subscription (from “subscription video-on-demand” services, or SVODs) this year, with levels declining from 89% to 82%. Traditional subscription TV (from “multichannel video programming distributors”, or MVPDs) dropped from 62% of viewers to 55%. vMVPDs (streaming-only MVPDs, or “virtual MVPDs”) showed no statistically significant change.

Reinforcing what the researchers are calling a trend towards “de-stacking” is the finding that a smaller share viewers report currently having subscriptions to three or more of the “Big 5” SVODs (Netflix, Hulu, Amazon, HBO Max, or Disney+). In 2022, half (50%) reported 3 or more subscriptions; in 2023, this has dropped to 42%.

Perifery, a recently launched division of DataCore was created to provide compelling content management solutions for the broadcast industry. At NAB 2023 in Las Vegas, Perifery CEO Dave Zabrowski shares the company’s vision and development of a product that will dramatically streamline workflow for video producers. It’s a critical time for media producers, given the rise of AI and the vast amounts of data they must now juggle to create content efficiently and effectively. In addition to data stored on traditional local servers, producers are increasingly utilizing AI and storing and retrieving data-rich content from the cloud and streaming sources. “Imagine having to search endlessly for the right piece of content. It holds up the creative process and makes the job more difficult than it should be,” Zabrowski explains. Media producers need to get at the data fast and in an organized fashion to complete projects quickly—the new award-winning Perifery AI+ announced at NAB is the enabler. Meta-aware and intuitive, Perifery AI+ accelerates content searching, browsing, reviewing, and previewing, enabling users to rapidly locate content clips and objects based on specific topics. It’s THE missing link to maintaining productivity in today’s data-rich environments. “Plus, it’s ready for the future,” says Zabrowski, as he describes how producers may one day also have access to new sources of content, such as data from consumer wearables. “The M&E market is in the golden age of disruption and Perifery is poised to lead it with products like Perifery AI+.”

During an exclusive interview with Perifery CEO Dave Zabrowski, we learn how the needs of media producers have advanced to a point requiring a more sophisticated means of content storage and retrieval. The company’s new Perifery AI+ was created to do just that. Watch the video below to hear how.

For more information about NAB’s award-winning Perifery AI+ and how content producers can benefit from integrating it into their workflow, please visit  www.perifery.com.

NEW YORK—As Warner Bros. Discovery prepares to launch its combined streaming service on May 23, the company reported Q1, 2023 earnings that showed the heavily indebted firm is making progress on its plans to cut streaming costs and reduce losses while continuing to retain and attract new direct-to-consumer subscribers. 

Based on those positive trends, the company also said that it now expects its U.S. direct-to-consumer (DTC) segment to be profitable in 2023, a year ahead of its previous guidance. 

In the Q1, total DTC subscribers around the world were 97.6 million, an increase of 1.6 million global subscribers since the end of Q4 while DTC operating expenses were $2,405 million, down 24% (excluding currency fluctuations) compared to the prior year quarter. 

Overall, DTC adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $50 million, a $704 million year-over-year improvement on a pro forma combined basis.

In the U.S. DTC subs for HBO, HBO Max and Discovery+ increased to 55.3 million in Q1 from 54.6 million in Q4, 2022 and 53.4 million in Q1, 2022. 

We’ve come through some major restructurings and have repositioned our businesses with greater precision and focus,” said David Zaslav, president & CEO in a statement announcing the earnings. “And we see a number of positive proof points emerging, with DTC perhaps the most prominent. We made a meaningful turn this quarter with $50 million in segment EBITDA and 1.6 million net adds, and we feel great about the trajectory we are on. In fact, we now expect our U.S. DTC business to be profitable for 2023 – a year ahead of our guidance.”

LOS ANGELES—Despite widespread concerns that the streaming business is reaching a more mature stage of slower growth, the Digital Entertainment Group (DEG) is reporting that consumer spending on subscription streaming (SVOD) services rose by 22.2% in Q1 of 2023 to $8.71 billion compared $7.13 billion a year earlier in Q1 2022. 

The SVOD data is sourced from Omdia. 

In its Q1 report on consumer spending on home entertainment products in the U.S., the Hollywood studios-backed group DEG also reported hefty spending in total digital home entertainment products, which hit $9.72 billion, up 17.49% from $8.27 billion a year earlier in Q1 2022. 

Electronic sell-thru revenue, however, fell 12.3% to $564.35 million in Q1 2023 from $643.57 million a year earlier and VOD revenue declined by 11.5% to $443.47 million in Q1 2023 from $501.08 million a year earlier, according to DEG

Spending on physical home entertainment products such as DVDs and Blu-rays continued to crater, slumping to $377.25 million in Q1, down 26.85% from $515.72 million a year earlier.   

Streaming video platforms have a serious, and growing, problem with subscriber retention—and it’s largely the result of the long-standing monthly subscription model. 

According to research from Antenna, while there were 68.7 million new subscriber additions across subscription video on demand (SVOD) services in the first half of 2022, there were also 57 million cancellations, resulting in only 11.7 million net new subscriptions. In both April and June of that year, streaming pioneer Netflix saw its churn rate within the first monthly billing period skyrocket to a whopping 23%. 

The streaming industry is undergoing its second fundamental shift since launching as a new, innovative distribution medium: the shift from growth at all costs to profitability. Instead of focusing solely on subscriber counts, platforms are emphasizing overall profitability to prove the sustainability of the medium. 

These efforts are led by price increases, sophisticated retention and churn marketing tactics, and overall financial belt tightening across content and technology spending. All of these are important tactics, but to get to the root cause and accelerate free cash flow generation, streaming platforms must first fix a subscription mechanism they borrowed from the music industry: the monthly SKU. 

The Problem with the Monthly SKU
Canceling a cable subscription is a frustrating process made nearly impossible by cable companies—and that’s partly by design. Monthly streaming subscriptions, on the other hand, offer consumers a refreshing level of user friendliness. Because signing up and canceling is so easy, consumers can come in and out at any moment, oftentimes paying for one month, binge-watching a highly anticipated and Zoom meeting relevant show, and then cancelling before their subscription renews for month two. 

However, in this case, what’s a dream for consumers is a nightmare for video streaming media companies. Monthly SKUs simply do not provide enough revenue per user to make video streaming profitable at the levels that executive suites and Wall Street are demanding. When a user walks away with no strings attached, media platforms are forced to dole out a lot of money—either through marketing channels or on new content—to reacquire that user. 

Deloitte estimates that it costs roughly $200 to acquire a user in the streaming video space. That means, depending on the cost of the subscription, it can take 12-24 months or more to recoup user acquisition marketing expenses alone on a monthly SKU. 

During the first two phases of streaming—innovation and subscriber growth—monthly subscriptions provided a level of convenience that facilitated a low bar for trial and served as a key competitive edge over cable, but now that streaming has solidified its place in the market, it’s time to kill the monthly SKU. 

Streamers are Switching Up Strategies for Value Extraction
Across the streaming world, platforms are taking steps to keep users in their service for longer and drive up revenue per user. There are examples everywhere we look: Hulu, Netflix, Disney+, ESPN+, and Apple TV+ all announced price hikes in in the last year. Netflix is cracking down on password sharing. 

Several SVOD services have launched cheaper ad-supported tiers in the last 18 months. And some one-time transaction-based platforms are reimagining their monetization approach in favor of subscription models that cultivate more consistent and long-term user revenue. 

Many platforms are also backpedaling on their original binge-watching models by spacing out their content drops. HBO Max’s “White Lotus,” for example, dropped on a weekly cadence between Oct. 30 and Dec. 11, spanning seven weeks and three billing cycles. Season 4 of Netflix’s breakout hit “Stranger Things” was released in two parts in 2022—the first on May 27 and the second on July 1. This tactic of dicing up hits helped Netflix turn its fortunes around after two consecutive quarters of losses in 2022. 

Curbing binge-watching is one way to extract more value from monthly subscribers, but subscribers like binge watching. We’re now in trade-off mode; to retain the convenience of a monthly subscription, platforms are beginning to dial back other consumer benefits. The alternative is to keep the binge-watching but nix the monthly SKU. Platforms could opt for an annual SKU, or even 3- or 6-month options to keep users in for longer. Major monthly SKU price increases are another lever, but are unlikely to be the best path for the industry. 

In practice, the optimal consumer growth and retention strategy will come at it from many angles, incorporating several of the tactics mentioned above. And when media companies spend less money acquiring customers, they can allocate more budget towards enhancing platform features, crafting engaging content, and continuing to truly improve the viewing experience. 

A Tough Needle to Thread
The pendulum has swung from the headache of the cable era to the ultra-convenience of the streaming era. Now it’s on its way back toward the center, and SVOD services are tasked with balancing user experience and revenue amid the churn chaos. They need to figure out a model that doesn’t bring users back to the frustration of the cable days, but also doesn’t allow them to jump from service to service too easily. 

Not every platform will be able to get away with killing the monthly SKU. The video platforms that function the most like music streamers may be able to survive and thrive with a monthly SKU. These will be the platforms with incredible brand value and massive evergreen content catalogues—think Disney+, not ESPN+. For some utility industries, like fitness, annual subscriptions alone might not be as compatible for their business model, but there will be better options than simply monthly or annual. 

The consumer’s wallet is finite, after all, and as platforms adopt longer subscription periods, consumers will eventually have to choose which platforms really matter to them. Content, not convenience, will be alone on the throne again. 

The monthly SKU was a hallmark of phases one and two of the streaming industry, in which facilitating trial, letting consumers understand a streamer’s content breadth, and lowering the regret decision barrier were paramount as streaming was still trying to prove itself. But as the space continually evolves and is met with new challenges, it’s time to shed this vestige of the old world.  

As streamers race to roll out FAST channels and ad supported services, a new survey from Yahoo and Publicis Media suggests that consumers are paying the most attention to ads that are placed in subscription services and that brands need to develop more finely honed CTV ad strategies. 

The results in a joint research study titled “CTV Ad Attention & Receptiveness” are important for an industry that has tried to right its finances by offering more ad-supported services. While the shift towards advertising has created new revenue streams, it also raises serious questions about the value of those ads and their effectiveness in engaging consumers, many of whom originally switched to streaming services as a way of avoiding heavy ad loads on cable and broadcast TV. 

The study noted that AVOD is rapidly gaining traction and is projected to reach 50% of the U.S. population, offering brands a significant opportunity to connect with consumers. Emarketer reports that ad spending on paid subscription services is expected to increase by 51% to $9.48 billion in 2023, while CTV ad spending as a whole will exceed $26 billion in the same year. 

That means that brands must optimize their CTV strategy to capture attention and positive brand sentiment in an increasingly competitive market, the researchers said, adding that to stand out, advertisers must understand the key variables that impact consumer attention and receptiveness to ads on CTV and develop effective strategies to optimize campaigns.

To answer some of those questions, the study investigated four ad-supported streaming app types: paid-subscription-based services that were either Hybrid (Hulu, HBO Max, Paramount+, Peacock, Discovery+, Disney+, Netflix, Amazon Prime Video) or vMVPD (FuboTV, YouTubeTV, Sling, Philo, DirecTV Stream), and non-subscription-based streaming apps that were either FAST (Tubi, Pluto, Roku, Crackle, Vudu, Xumo) or Smart TV FAST Channels (Amazon Freevee, Vizio’s WatchFree, Samsung TV Plus, LG Channels).

Overall the study found that ad attention is higher for more "intentional" paid subscription services. Viewers tend to pay more attention to ads on applications that are paid or subscription-based, particularly vMVPDs like YouTube TV, FuboTV, and Sling, as well as hybrid services like Hulu, HBOMax, and Paramount+ where there is “more intent” behind programming choice, the report found. 

The research indicates that while viewers tend to pay more attention to ads in subscription-based applications, ad attention still varies across all app types. Some apps, such as Xumo and the Roku Channel, outperform the FAST benchmark in terms of attention. Therefore, even in a FAST environment, it is important to be selective with the applications chosen for airing ads, the research found. 

Overall, the study found that consumers recognize the role of advertising in making less expensive programming possible and generally welcome ads in CTV environments. Nearly half (46%) of respondents said they would rather pay less and receive some ads when adding a new streaming service. Additionally, 82% of CTV viewers expect ads on free streaming services, and 7 out of 10 AVOD users report being at least somewhat satisfied with their CTV ad experience. Moreover, a significant percentage of respondents found ads to be useful, with 56% agreeing that ads and commercials provide them with useful information.

The study found that genres with higher engagement during viewing also had a higher share of ad attention. Crime dramas had the highest attention percentage at 46%, followed by political commentary/coverage at 39%, and game show competition at 38%. On the other hand, awards programming had the lowest attention percentage at 14%, followed by sci-fi at 16%, and action/adventure at 20%.

As expected, the study found that repetition can be a major annoyance and negatively impact brand sentiment. Over two-thirds (67%) of viewers are annoyed by seeing the same ad more than once within the same ad pod. Ultimately, Yahoo and Publicis Media found that attention drops when viewers are exposed to the same ad within two minutes, and remains lowered for ads aired less than 5 minutes apart. The study suggests an attention “sweet spot” of 6-10 exposures, while maintaining an optimal gap of 12 - 24 hours between exposures to avoid brand burnout.

Placement within ad pods was also important. On average, ads aired in the first in-pod position capture 6% more attention than ads aired in the mid or last pod position. If an ad airs in the first in-pod position, it captures at least 2 seconds of attention 38% of the time. In terms of attention time, ads aired in the first in-pod position capture 1 second more attention than ads aired in the mid or last pod position. On average, if an ad airs in the first in-pod position, viewers pay 11 seconds of attention. Meanwhile, shorter pod durations also matter, and get more attention and co-viewing, with consumers more receptive to them.

The timing of ad breaks has a significant impact on the receptiveness of viewers, the study found. Unnatural breaks, such as those that cut off a show mid-sentence, are considered "the worst," and many prefer the more natural breaks seen on cable. In fact, two-thirds (66%) of respondents said that ads that cut a show off at an unnatural place are the worst ad experiences, while 61% said the same for ads that cut a show off at a cliffhanger, and 47% for ad breaks that aren't evenly spaced out throughout a show. Many viewers want the streaming ad experience to be more comparable to the "natural" cable ad experience, with 55% saying that cable delivers more predictable ads and 51% indicating that they would like streaming ad experiences to reflect the cable ad experience. Most respondents also said vMVPD and Hybrid services deliver the most “natural” ad breaks.

The research was based on a dual-methodology approach, using both Big Data research and a Consumer Research approach. The Big Data research involved facial recognition and ACR data to capture attention metrics, analyzing 66,000 ads across four CTV ad environments, 1.3 million impressions, 5,000 households, and 15,000 individuals in 25 DMAs. This data was supplied by TVision. Additionally, the Consumer Research Approach included qualitative interviews and feedback, as well as a quantitative survey of 1,000 adult CTV consumers, which was executed by Open Mind Strategy.

LONDON—The average annual spend per U.S. household on video services is set to fall by 8% by 2027 according to the latest research from research firm Ampere Analysis, which adds that 2023 mark the point when per-household spending on subscription streaming (SVoD) services in the U.S. could no longer compensate for the continued decline in pay TV and spend on video begins to shrink.

Annual bills for video content peaked at $1,146 per household in the U.S. in 2022 with a post-pandemic bounce-back in theatrical expenditure and an 18% year-on-year increase in SVoD outlay to $374 per household per year. 

This year, however, SVoD revenue growth in the U.S. will slow, hindered by market maturity and economic pressures. The added impact of cord-cutting will see yearly pay TV investment per average household fall below $650 for the first time since 2006. The result is likely to be the beginning of a slow decline in annual average household expenditure on TV, Ampere said.

Meanwhile, in Western Europe, where the pay TV market is stable, increasing demand for SVoD services will drive an 11% increase in household expenditure on video by 2027. In fact, Norway’s per household spend on video is set to overtake the U.S. in 2025, the first Western market to do so, according to Ampere. Norwegian homeowners will each be spending more than $50 more on video than U.S. households by 2027, and almost $300 more than the average U.K. home, and substantially more than those in Germany, France, Spain and Italy.

“Spend on video has finally hit its limit for US households, said Maria Dunleavey, Senior Analyst at Ampere Analysis. “As the U.S. subscription OTT market edges closer to saturation point and demand for pay TV continues to fall, annual spend per household on video services has tipped into decline. By 2027, unless streaming services can sustain significant price inflation, U.S. households will be investing almost $90 less per year on video services. 

“Recent moves from TV groups to focus on hybrid tiers and free ad-supported video services represent one approach to compensating for this downward pressure,” Dunleavey added. “By contrast, in Western Europe, pay TV expenditure is more stable and the expansion of SVoD continues to drive spend on video. For U.S. groups, capitalizing on this international growth is increasingly key given the pressures on domestic income.”

SAN JOSE, Calif.—A major new study of consumer video trends by TiVo indicates that the video and streaming industries face a number of pain points as total viewing time stagnates and the number of streaming video services being used continues to rise, further fragmenting audiences for advertisers and the sources of content for viewers. 

Overall the average number of services used jumped from 8.9 in Q4 2021 to a record 11.6, the first time they had moved into double-digital levels. Meanwhile, churn rates continued to rise, with 26.6% of respondents dropping a SVOD service over the last 6 months, an increase of over 8.0% year over year, TiVo said. 

As the number of services being used by consumers jumped, viewing slightly dropped from 4.5 hours in Q4 2021 to 4.4 hours in Q4 2022, indicating that streamers will have a harder time standing out from the pack and that cost conscious consumers are frequently dropping subscription services (churning).   

The data showed that people across all age groups increased the services they used, with the number of services growing even among the less tech savvy 77+ year-olds (up 23.3% to 5.1) and baby boomers (up 21.9% to 6.2). 

The most rapid growth was among Gen X (up 47% to 12.2), followed by millennials (up26.3% to 16.3). Interestingly, Gen Z showed the slowest rate of increase in the number of services they used (up 10.8%) to 12.7. 

Upper income groups used the most services with homes earning more than $200,000 using on average 21.1 services. 

Much of the growth was in the free AVOD and FAST channel area, where the average number of services jumped by 69% from 2.4 in Q4 2021 to 3.9 services in Q4 2022. 

But SVOD services also grew, increasing from 6.5 used on average in Q4 2021 to 7.6 in Q4 2022. 

SVOD services also continue by far to dominate the streaming landscape. The number of SVOD services used is still nearly double that of free services and their share of viewing is significantly higher than free services, with SVOD accounting for 30.1% of viewing (down from 31.$% in Q4 2021), compared to 23.5% for the free services (more than double the 10.3% share in Q4 2021). 

The new TiVo data shows that pay TV viewing continued to decline, dropping from 38% in Q4 2021 to 32.1% in Q4 2022. That indicates that some of the growth in the number of streaming services being used can be traced to cord cutting. 

While local broadcasters have been slow to embrace streaming and continue to be hurt by the collapse of the pay TV industry in terms of their retransmission fees, the report highlighted some encouraging trends for them.

Nearly one quarter of all viewing time (23.4%) being spent on local content, TiVo reported. Much of this is still done via the declining pay TV ecosystem (with pay TV services accounting for 49.6% of local content viewing and vMVPDs 18.6%). But 10.4% were viewing local content via an antenna and 6.4% was being done on a free streaming channel as more FAST services launch live linear local services, TiVo reported. 

The report also found some notable shifts in consumer spending. Pay TV bills dropped from $124.40 in Q4 2021 to $119.91 in Q4 2022. Average spending on SVOD services increased to $49.08, from $42.03 in Q4 2021  and streaming sports subscription services increased to $48.28 in Q4 2022, up from $41.89 a year earlier. 

Despite economic worries, overall spending on entertainment rose by nearly $20 to $189.38 in Q4 2022.   

But economic worries about spending do seem to be accelerating the shift to free services, TiVo’s researchers reported. 

According to the report, adoption of totally free video services, including AVOD and FAST, has grown by almost 70.0% year over year – reflecting that these services continue to capture a greater share of the market. 64.0% of consumers now utilize at least one AVOD or FAST service, driven largely by millennial audiences, up from 60.0% year over year. 

The number of choices continues to benefit consumers, but it has led to content discovery becoming even more complex and varied, the report noted. The survey also found that people still mostly rely on commercials and word of mouth to inform them of other TV shows and movies they’d like. 

Content discovery continues to be a pain point for the industry and consumers, though only 8.7% of the respondents said they were unhappy with the recommended content. Another 34.4% said they were indifferent to the recommendations and 55.9% said they were happy with them. 

“We’re at an inflection point in the digital entertainment industry as consumers seek to take advantage of the flood of content choices and service types available but now wrestle with the paradox of choice.”  said Scott Maddux, VP of global content strategy and business at Xperi, which owns TiVo. “Discovery shouldn’t be a chore, and it is imperative that entertainment platforms and video technology providers prioritize simplicity for consumers in order to make discovery and viewing experiences as enjoyable as possible.”

Additional TiVo Video Trend Report highlights include: 

• Bingeworthy content: More than half of respondents (53.0%) prefer when the whole season of a TV show is available at once, compared to only 24.7% who prefer episodes to be released one per week. During Q4 there was a strong difference among men and women in consuming content, with women reporting a strong preference for the opportunity to binge a whole season (61.0%), whereas men report a stronger preference for the weekly release schedule (60.0%).
• Generation gap: When examining the increase of video services, there are some glaring differences among service consumption when it comes to age groups. Millennial respondents  consumed significantly more than any other age group with an average of 16.3 sources compared to Gen Z with 12.7 sources and Gen X with 12.2 sources. 
• Eye on spending: In recent months, respondents appear to be evaluating and adjusting their entertainment spending more often, with around 18.0% saying they currently do so every month or more compared to only 13.0% a year ago. 
• Entertainment at home: While the recent pattern of economic inflation has caused 30.0% of respondents to reduce their overall entertainment spending, almost three-quarters of respondents (74.0%) say they’re slightly or much more likely to look for entertainment at home than going out. To support this at-home entertainment, these respondents are investing in their home set-up with one-third purchasing a new TV in the last six months. 

TiVo TV Viewership Data includes second-by-second level data captured from set-top-boxes within households across all 210 DMAs in the U.S. The data reflects both live or time-shifted viewership information which is the cornerstone of TiVo’s expertise in TV data processing.

The latest TiVo Video Trends Report surveyed 4,493 adults 18 and older living in the U.S. and Canada during the fourth quarter of 2022 (3,500 US, 993 Canada). 

Find more information from the latest Video Trends Report here. 

 LOS ANGELES—Despite wide-spread fears of an imminent streaming slowdown and shakeout that have hammered stocks of major streamers and media companies over the last year, new data from the Digital Entertainment Group shows that consumers continue to embrace the medium in record numbers, with consumer spending on subscription streaming video services rising by $7.9 billion in Q4 2022 and full year SVOD spending jumping by 17% to $30 billion. 

Ad-supported AVOD and FAST channels also saw record revenues, hitting $16.8 billion in 2022, up 40% from 2021, according to data from Omdia cited by DEG. 

 The data suggests that the U.S. market for streaming isn’t headed for a recession anytime soon and that the market continues to see relatively impressive growth compared to the overall economy. 

Overall U.S. consumer spending across digital and physical home entertainment formats in 2022 was more than $36.5 billion, an 11.4 percent increase from the almost $33 billion consumers spent in 2021, driven by a raft of strong franchise properties coming from theaters and television.

Consumers spent $34.5 billion on digital entertainment purchases (EST2), rentals (VOD2) and subscriptions for the full year, a jump of 14 percent over full year 2021. Spending on subscription streaming rose more than more than 17 percent for full year 2022, topping $30 billion.

In the year’s final quarter, overall consumer spending rose 8.3 percent, representing just over $9.5 billion, even though box-office spending on the titles released to the home in the fourth quarter fell almost 25 percent from the year earlier period. New theatrical releases are historically a key driver of home entertainment spending. Consumers spent almost $9 billion on digital entertainment purchases (EST), rentals (VOD) and subscriptions in the fourth quarter of 2022, an increase of 11.5 percent.

Other highlights for Q4 2022 and the full year included: 

• Digital purchases (EST) were up 2 percent for the year, with spending on theatrical content up 11 percent and spending on TV content down 13 percent, DEG reported. 
• After strong gains in the first three quarters of the year, digital purchases (EST) of theatrical content were down 16 percent in the fourth quarter. This was due to smaller box office titles released, including less favorable home entertainment genres like horror and comedy.
• The surge in theatrical new releases in the first three quarters also benefited premium physical formats, with spending on 4K UHD Blu-ray titles ending the year with 20 percent growth. The most in-demand 4K UHD titles of 2022 reflect many of the year’s biggest titles overall, including “The Batman, Doctor Strange in the Multiverse of Madness”, “Jurassic World: Dominion”, “Spider- Man: No Way Home” and “Top Gun: Maverick”.
• Digital purchases (EST) of TV product experienced declines of 12.8 percent for the full year, but only 2.2 percent in the fourth quarter, which was driven by strong demand for the most recent season of the megahit series "Yellowstone", along with previous seasons and the spinoff "1883".
• U.S. consumer spending on subscription streaming rose to $7.9 billion in Q4 2022, with growth slowing slightly to 15.4 percent. Spending on subscription streaming for the full year was $30 billion, an increase of more than 17 percent.
• In parallel, ad-supported premium AVOD and FAST content reached an estimated advertising revenue of $16.8 billion in 2022 according to estimates from Omdia4, as more major streamers diversified their offerings to include lower cost subscription plans with ads. Omdia estimates show ad revenue grew by more than 40 percent for the full year, DEG reported. 

We’ve witnessed the subscription video on demand (SVOD) market expanding at a remarkable rate over recent years, yet as we approach the end of 2022, there are signs that the market is slowing down. This is hardly surprising given the fact that consumers around the globe are feeling the pinch of inflation and the increased cost of living. 

Conversely, advertising video on demand (AVOD) services are experiencing a surge in demand. We’re also seeing a trend toward multi-tiered hybrid models offering a reduced fee service with limited advertising alongside the standard ad-free subscription service. With the market going through a period of change, is the golden era of subscription-based video-on-demand over? 

Subscription vs. Advertising
Although advertising-based content is growing in popularity, it still may not be the right fit for all video services. Services that adopt a subscription-based model have the benefit of having a predictable monthly revenue stream. 

However, to guarantee that regular income, there is a need to ensure that the content shown is valuable enough to the viewer to justify the subscription fee. The constant need to provide new, high-quality content typically requires big investment. The market is extremely competitive and there is relentless pressure to attract new subscribers and minimize churn.

While AVOD lacks the revenue certainty that comes from having a subscription-based model, it is generally considered easier to build a larger audience with this approach. This is understandable given that you don’t have to convince people to part with any money before they engage with the service. 

However, there is always a risk that ads could annoy viewers enough to make them switch off. This is why it is so critical to get the ratio of ads to content right. After all, ad-revenue is dependent on viewing numbers, and more viewers means higher ad-revenue. 

One thing that has changed over recent years that has helped AVOD to gain a bigger market share is the ability to provide highly personalized ads. If you think back to the days when SVOD services were first taking off and people were switching from linear TV, one of the appealing features of an SVOD format was the lack of ads. 

It’s worth remembering that at the time, ads on traditional linear TV were not able to target the viewer anywhere near as effectively as they do now. Viewers often had to sit through irrelevant ads one after another. But as technology has advanced, ad personalization has become much more effective and sophisticated. This benefits both viewers and advertisers. A well targeted ad is more tolerable for viewers and improves ROI for advertisers because it’s reaching the right consumers. 

Regional Factors
Ad-based content tends to be more popular in some regions than others. When Disney launched its ad-supported service earlier this year, it opted to do so in the US first, where AVOD is particularly popular among viewers. According to a recent report, a higher proportion of viewers choose AVOD services in the U.S. than in other countries. The AVOD market in the US is predicted to grow by $19 billion to $31 billion by 2027. 

Advertising based streaming plays a less important role in Europe than in the U.S., although there are signs that this is changing. Recent analysis shows that revenue from the AVOD market is increasing in all European countries, and was three times higher in 2021 than 5 years previously. 

The U.K. has the highest digital video ad spend in Europe at over $4.4 billion. UK broadcaster, and Accedo customer, ITV recently announced that it is launching a new advertising based platform ITVX that will include numerous AVOD services, as well as additional themed FAST channels.

Looking to the Future
With SVOD’s domination over the streaming market appearing to come to an end, many video providers are launching new services or packages to achieve a business model that is more sustainable for the long term. The most notable of these launches is perhaps Netflix’s introduction of an ad supported plan with a reduced fee that delivers 4-5 minutes of ads per hour of content. 

The Basic with Ads subscriber option is available in 12 countries initially and is likely to expand to include additional countries at a later date. When Netflix first announced its intention to introduce an ad supported package in April, it sent out a clear message to the industry that the market is changing, and relying solely on SVOD may be risky.

Global AVOD revenue is forecasted to reach $70 billion by 2027, so ad-supported models will play a key role in the future of the video-on-demand market. SVOD most definitely still has, and will continue to have, its place in the market. For some services, and for some regions, it will remain the right choice. 

However for other services, it looks like hybrid ad-supported/subscription services may well be the most sustainable model for the long term. What’s clear is that tailoring the model to the region and audience will be crucial for longevity in the VOD space over the coming years.

A new report from U.K. media research firm Rethink TV estimates that global SVoD services will top 1.9 billion subscribers by 2028, in a market worth $171.9 billion.

In its “Subscription Video on Demand Market Forecast 2023-2028,” the researcher examines the impact that the emergence of advertising tiers from the likes of Netflix and Disney+, as well as the increasing popularity of FAST channels will have on the traditional subscription video on demand market. 

“Just prior to releasing last year’s SVoD forecast, Netflix confirmed its first subscriber loss—of 200,000 subs, or around 0.09% of its total,” the researcher said. “This prompted a wave of hysteria, and in the year since, Netflix’s return to growth and confirmation of its advertising strategy has largely set the market at ease.”

Netflix’s ad-supported tier, which launched in November 2022 for $6.99 per month, is part of a boutique of four levels of subscriptions, with premium currently priced at $19.99 per month. Although it didn’t offer specific numbers for the new tier,  the company saw the number of subscribers worldwide increase by 7.66 million in its latest quarter. Disney+ launched its own ad-supported subscription tier for $7.99 per month in the U.S. in December. 

But there’s another threat on the horizon—the increasing popularity of FAST (free-ad-supported TV) services that mimic traditional pay-TV channel EPGs, but without the subscription fees. These services are most often accessed through smart TVs from Samsung, Vizio, Roku, etc. 

This new normal could upend the SVoD market, Rethink says.

“Complicating counting is the fact that we are about to enter a phase where SVoD services have ad-supported customers, AVoD services have subscription tiers, and FAST will undoubtedly start playing with on-demand video. The clock is also ticking until these VoD services have live linear feeds, and Netflix is due shortly to launch its first live stream,” it said. “Disney and Netflix are now in the early stages of their advertising expansion. Both have chosen to price their ad-supported bundles at a slight discount, to ensure that they can maintain their ARPU via the ads served. In time, we suspect that the SVoD platforms could see significant lifts in ARPU via advertising.”

With Netflix, in particular, moving to eliminate password sharing, Rethink suggests that the service offer a free ad-supported tier to which it could move those sharers to. 

“Neither Netflix or Disney have opted for an entirely free tier, supported by a much heavier advertising load,” Rethink said. “This is significant, because the issue of account sharing has raised its head in the past year. With free options, SVoD services would be able to migrate a user from an existing SVoD subscription and into a free account with only an email address and basic account details. This would serve to keep the number of subscribers high, and potentially provide a significant boost, if the estimates of ‘freeloader’ accounts are as high as some in the industry maintain. However, as soon as a payment method is required, the success of converting a freeloader into an active subscriber plummets.

“Netflix has not broken out detail of its conversion rates, but there are nascent third-party estimates of the proportion of new additions that have chosen the ad-based tier,” the researcher added. “The coming quarters will likely provide some insight, via investor call disclosures, but the SVoD platforms will be tightlipped in the meantime.

Rethink says that Netflix will continue to boast about its profitability, especially when compared to competitors which are still operating at a loss, including Comcast, which just reported full year revenues that showed $2.1 billion earnings for Peacock, but was hamstrung by an attributed loss of some $2.5 billion. 

“To this end, ARPUs across the board need to rise, and advertising is going to play a major role in this regard,” it said.

LONDON—U.K. media research firm MIDiA Research says it expects revenues for the subscription VOD market worldwide to reach $131.6 billion in 2023 and grow by nearly 25% at year, garnering $321.9 billion by 2030. 

The researcher painted a mixed picture in which a slowdown in the global economy will negatively impact the SVOD market, which grew rapidly during the global pandemic lockdown of the past three years. It said future growth will be driven primarily by an influx of Asia-Pacific subscribers, citing the recent success of such titles as Netflix's "Squid Game" and "Parasite," which won the Academy Award for Best Picture in 2020.

According to the report, the global SVOD market was valued at $105.7 billion in 2022, representing a 24.6% increase from 2021's $84.8 billion. While growth rates are expected to decline from the high of 46.6% in 2020, subscription revenues are forecasted to grow by 24.4% to reach $131.6 billion in 2023.

The report also highlights regional trends, with North America accounting for 18.2% of global video subscribers and 38.6% of global streaming revenue in 2023. However, by 2030, North America's share is expected to decrease to 13.2% of global subscribers and 32.2% of global revenue.

In contrast, the Asia-Pacific region is poised to continue its dominance in the industry, with 56.2% of global subscribers and 32.2% of global revenues in 2023, and 58.8% of global subscribers and 34.5% of global subscription revenues in 2030, overtaking North America to become the largest revenue market by 2030. Disney is expected to maintain its market leadership between 2023-2030, with Netflix now established as the second largest subscriber base.

“The subscription distribution dominance of Asia-Pacific will prompt intense competition from Western SVOD services, as they try to corner the world’s biggest regional market,” said Tim Mulligan, Lead Video Analyst for MIDiA Research. ‘Western SVOD content commissioning will be partly recalibrated towards Asian movies and shows that speak to global audiences. Efforts to discover the next 'Squid Game' or 'Parasite' will amplify Asia-Pacific culture globally to create a new golden age for Asian entertainment that will compete directly with Hollywood mainstream studio output”  

Perry Gresham, Forecast and Modelling Analyst for MIDiA Research, explained the researcher’s “bear scenario” on the market.

“For the first time, [we created] an alternative forecast that considers the case in which the current recession has more impact on video streaming subscriptions than we anticipate,” Gresham said. “It represents the scenario where, in a harsh 18-month recession, subscribers cancel some number of their subscriptions. Subscription growth over the next two years would more than half. A post-recession rebound will eventually see the gap in subscriptions narrow to just below base—with recovery varying by region. North America and Europe remain the furthest below their base scenario in the years leading up to 2030.”  

“After eight years of steady expansion, global subscriber numbers will have neared their peak by 2030, added Ben Woods, Video Analyst for MIDiA Research. “That leaves Western SVOD services with a narrowing window of opportunity. With competition intensifying from indigenous services within Asia Pacific and emerging markets, gaining those remaining subscribers will be tough.”  

LONDON—As SVoD services in the US mature, pricing and bundling are key to retention, according to a recent report by Ampere Analysis. Newer platforms (including Disney+) tend to have higher levels of both sign-up and churn as they rely more heavily on individual title launches, while established SVoD platforms’ sign-up and churn rates are much more affected by pricing changes, Ampere said.

Ampere’s latest analysis shows that bundling is key to help mitigate price sensitivity, with Hulu and Disney+ having both benefitted in terms of sign-up and churn from the strength of the Disney Bundle.

With U.S. SVoD homes now having access to an average of 4.5 streaming services, newer SVoD players are continuing to see strong gross additions to their subscriber base. But the increasingly saturated SVoD market presents growing challenges for established services to maintain success, according to Ampere. As U.S. consumers edge closer to the stacking “ceiling,” attracting new subscribers and mitigating churn is more important than ever.

Because of this, retention is becoming a key battleground—for all SVoD platforms, leavers are primarily in younger, lower-income demographics, who are more sensitive to pricing and content offering. Discounted ad-supported tiers will mitigate churn here.

Another option to address price sensitivity is bundling. Hulu’s US sign-up and cancellation rates now mimic those of Disney+, as its users increasingly purchase their subscription through the bundle. Almost one third (32%) of Hulu subscribers have bundled with Disney+.

Pricing is key for established players, while new services rely on regular content releases, Ampere said. Disney+ uses franchise title releases and its first live broadcast to drive sign-ups. 

The first large peak in daily sign-ups seen on Sept. 8, 2022 corresponds with Disney+ Day, an annual event that marks the release of exclusive premieres and the announcement of upcoming content. This year’s Disney+ Day saw the release of big franchise titles including Thor: Love and Thunder, Pinocchio, and Obi-Wan Kenobi: A Jedi’s Return. The next large peaks fall on Sept. 19, 2022, with the premiere of season 31 of Dancing with the Stars, and on Sept. 30, 2022, with the release of Hocus Pocus 2.

“The increasingly competitive SVoD market makes it hard for established services to maintain growth, while newer players continue to see strong gross additions but struggle to retain those customers,” said Mayssa Jamil, analyst at Ampere Analysis. “Pricing and content offering being the main drivers for sign-up and churn, a great way to aid customer retention is through bundling: it combines both of the above by offering larger catalogues and more frequent content additions at cheaper prices. We see this at play when looking at the way Hulu and Disney+ sign up and churn rates increasingly mimic one another thanks to the strength of the Disney Bundle.”

LONDON—Ampere Analysis has rated Paramount+ as the top streaming service in the U.S., in terms of value, based on the company’s “Popularity and Critical Rating” formula. 

Priced at $6.00 but with a content value of over $8.50 a month, Ampere says Paramount+ provides the best streaming value in the U.S. Disney+ is a close second with a content offer able to justify its recent $3.00-a-month price increase for the ad-free tier, according to the latest Popularity and Critical Rating data from Ampere Analysis.

Paramount+’s overall content offer is boosted by the breadth of its diverse content catalogue and the popularity of several hit Reality TV franchises, the researcher said. In addition, it is supported by Paramount Global’s long-running Crime drama series plus a strong mix of licensed movies and TV shows from other suppliers. Ampere’s analysis suggests Paramount+ has plenty of headroom for price rises while still remaining competitive with its US streaming peers based on its content offer.

The findings are contained in Ampere’s latest report, The value of content to major streaming services in the US, which uses Ampere’s Popularity and Critical Rating metrics to assess the relative market value of content to the price a streaming service is able to charge viewers for access.

The analysis assesses the contribution made to the market value of different content suppliers, both in-house and third-party. Paramount Global productions contribute the most to the value of Paramount+ at 40% of the market value. Licensed classics including The Brady Bunch and Star Trek: The Original Series pack a punch, generating 28% of the market value, despite contributing just 9% of the titles available on the platform.

In-house Crime & Thriller titles are the most valuable per title to Paramount+ with classics like The Godfather, NCIS, and CSI. But Paramount Global-produced Children & Family titles add considerable value to a different, younger audience segment with titles like Avatar: The Last Airbender and iCarly.

Disney is the only other major U.S. streamer analyzed that had such a stark price-to-market value disparity, Ampere said. Although pursuing a very different content strategy, Disney is buoyed by its big-name franchise content and Intellectual Property with Marvel Cinematic Universe titles contributing the most value relative to volume within the content offer. Other Disney-owned content, primarily children’s live action and animation are the single largest contributor to value, driven by the volume of Disney’s archive. But even Disney+ still derives 30% of the value of its content offer from third-party licensed content, the researcher said.

“As a later entrant to the US streaming market, Paramount+ is maximising great value as a marketing tool relative to some of its more established peers, said Ben French, Analyst at Ampere Analysis. “Simultaneously, it is also leveraging the substantial catalogue and key Reality and Entertainment franchises of Paramount Global. Our unique analysis shows the huge importance of franchise content and film and TV based on character IP. It also highlights the on-going importance of licensed content from third-party suppliers, not just to Paramount+ and Disney+ but to all the streaming services analyzed.”

Streaming services that provide ad-supported video on demand services along with traditional subscription-based services will dominate the streaming landscape over the next five years according to a new report from Digital TV Research.

The researcher predicts that global SVOD subscriptions will increase by 428 million between 2022 and 2028 to  reach 1.76 billion, “showing that there is still plenty of growth left,” it said.

With Netflix’s introduction of its lower-tier cost ad-supported streaming service launched last month, two of the most dominant streaming services—Netflix and Disney+—both now offer hybrid AVOD-SVOD services and are expected to continue that dominance through 2028, Digital TV Research said, adding that viewers that subscribe to such hybrid AVOD-SVOD subscriptions will comprise the majority of their subscription bases in five years.  

“We estimate that  Netflix will provide its hybrid AVOD-SVOD tier in 85 countries by 2028, with Disney+  in 91 countries, HBO in 55 and Paramount+ in 56,” said Simon Murray, Principal Analyst at Digital TV Research. “These include pan-regional  services in Spanish-speaking Latin America and also in the Arabic-speaking  countries.” 

These four platforms collectively will have 372 million hybrid AVOD-SVOD  subscribers by 2028—or 56% of their total subscriber base.  

Given that Disney+ subscribers in most markets are expected to convert  automatically to the hybrid AVOD-SVOD tier, the platform will have 206 million subs  to this tier by 2028—or 88% of its total. At the other end of the scale, 24% of Netflix’s  total subscribers will pay for the hybrid AVOD-SVOD tier by 2028—or 63 million.  

Murray continued: “Netflix has a large base of SVOD-only subscribers. Most of  these subscribers will remain on these plans, despite the AVOD-SVOD tier being  considerably cheaper. The hybrid tier will appeal most to developing countries  where disposable incomes are lower. The hybrid tier will also be attractive to new  subscribers that do not have legacy SVOD-only subscriptions.” 

Fickle subscribers dropping SVOD services continue to be a major problem for the streaming industry, with new research showing there were 32 million subscription cancellations of subscription video streaming services in Q3 2022 among the 10 major SVOD services tracked by Antenna. 

That slowed overall SVOD subscription growth to 2.5% in Q3 versus Q2. The sluggish Q3 growth was however better than Q2, which was up only 1.5%, the smallest increase Antenna has seen since starting to track the market in 2019. 

“Antenna has long highlighted Churn as a crucial dynamic in the SVOD industry,” explained Jonathan Carson, co-founder and chair in a blog post analyzing the data, who noted that the 32 million cancellations in Q3 was significantly up from the two previous quarters when they were running at about 28 million during each quarter. 

“The Average Monthly Churn rate for the Premium SVOD category reached 5.8% in September," he said. "To put this in perspective, category Churn in 2021 was 4.5%; in 2020 it was 4.0%; and in 2019 it was 3.2%.”

“Historical Churn data becomes even more insightful when analyzed at the Service level,” Carson added. “Antenna previously documented a meaningful uptick in Netflix Churn following its last price increase in January 2022. In fact, Netflix’s Average Monthly Churn was up again in Q3, to 3.5% from 3.4% in Q2, and 2.0% in 2021.”

Carson stressed however that the problem of churn varied significantly between different players.

Services that have launched in the past three years since the so-called “streaming wars” began like Apple TV+, Discovery+, Disney+, and Peacock all have had fairly stable churn levels since their launch periods.

Another group which is made up of legacy linear brands like HBO, Showtime and Starz have also seen relatively stable churn rates in part due to their long experience of intense competition with each other. 

SVOD originals like Hulu, Netflix and Paramount Plus were initially “so differentiated in that less competitive market that they had significantly lower Churn than they face today,” Carson argued. “As the market became more competitive, however, the differentiation was more difficult for consumers to identify and the average monthly Churn rates rose accordingly: from 3.7% in 2020 to 4.7% thus far in 2022 for Hulu; from 4.9% to 6.4% for Paramount+; and from 1.9% to 3.3% for Netflix.”  

“All in all, competition in SVOD will only intensify in the future, so having a robust understanding of what impacts Churn and the strategies available to minimize it will continue to be critical for all market players,” he concluded. 

‍Details on Antenna’s methodology and metric definitions are available here.

Cost-consciousness is on the rise in the face of economic uncertainty. As businesses that rely on subscription revenue examine budgets and fiscal goals for 2023, subscription video on demand (SVOD) and cable TV providers need to carve out room for ad-supported revenue to be part of their strategy. 

The free ad-supported streaming television (FAST) and ad-supported video on demand (AVOD) markets are large. FAST is expected to generate $6 billion in ad revenue by 2025. With the media sector in turbulence as viewers reassess their viewing options and spending habits, ad revenues promise to alleviate pressure from shrinking subscription revenue growth rates. 

Currently, there are more than 1,400 FAST channels available from major OTT and linear companies including Disney, Paramount, BBC, and A&E. But it’s unlikely that the growth the sector has seen, especially since the start of the pandemic in 2020, will continue without some failures. SVOD faces the same challenges.

Media organizations should be planning for rapid change in 2023. If the pandemic taught us anything, it’s how quickly viewing habits can change — for better or worse.To maintain diversified content offerings and manageable prices for wallet-conscious consumers, revenue models must balance both cost and profit.

Churn vs.  Monetization
SVODs have massive viewership numbers, but threats loom. Growth rates haven’t managed to reach pre-pandemic levels seen through 2019, and decreased slightly in 2021. Parks Associates recently reported that the SVOD industry average churn rate was about 45 percent—and was likely to increase as subscribers cut costs in today’s uncertain economic climate. Viewers will stick around if they perceive value. That means fresh, relevant, diverse content. For some SVODs to achieve that, they will need to revamp offerings.

Partnering with FAST providers is one potential strategy. There are multiple ways to monetize FAST: channels can be licensed to SVODs, branded to be “presented by” an SVOD. More prominent listings on users’ screens could be offered to FAST companies willing to partner with SVODs. SVODs get more content, and FASTs have new ways to reach bigger audiences. 

Amazon’s Freevee platform has partnered with FAST channels like Fuse Media’s Fuse Backstage and Fuse Beat, for example. Fox is running three FAST channels on the Amazon news app on Fire TV, too.  The numbers suggest that combining the strengths of both services is a viable approach not only for survival, but also for growth. While the largest SVOD platforms boast far higher engagement than individual FAST services, FASTs still have significant offerings. Pluto alone accounts for 5.1 billion minutes, and all FAST services combined account for more minutes than subscription offerings, according to Barclay's Kannan Venkateshwar.

Today’s economic and user trends suggest FAST is closing this gap quickly, and a recession will most likely provide additional accelerant. Though services are protective of user data, the steady growth of channels and platforms suggests the FAST pie is steadily growing. With 87 percent of US homes now using smart TVs, potential FAST  accessibility is nearing a saturation point. 

The Importance of UX
Making the services more user friendly while expanding and differentiating viewing options is among the key challenges facing all FAST players. FAST has done wonders for legacy content owners and will continue to be a favorite destination for news, sports, and niche content. But there’s huge opportunity for mainstream genres such as scripted series. Original, written programming boomed during the pandemic and will continue to grow, FX CEO John Landgraf recently argued.

Smart cross-branding with SVOD and even linear TV can turn FAST channels into revenue engines. There is tremendous opportunity for FAST services that offer one-of-a kind content, given that content overlap for FAST services is about 80 percent compared to around four percent for Disney+ and nine percent for HBO Max, per Barclay’s Venkateshwar.

User experience will also improve in the months and years to come. While some users may enjoy the familiar feel of scrolling through channels, these are not your parents’ TV listings. With nearly two dozen services, each with hundreds of channels, locating any particular channel can be daunting. Searchable and customized user interfaces similar to SVOD platforms, on the other hand, will help FAST services capitalize on their free, no-barrier entry.

The Importance of Data
Data will play a critical role in these synergies between SVOD and FAST moving forward, and in determining which services and channels rise to the top. 

FAST channels provide instant data on content performance, enabling near-real-time tweaks on content strategies. Because SVODs know the content types that their audience likes, they’ll already have a sense for what content and channels they’d like to partner on. FAST’s real-time data insights can bolster those insights further, a value-add that FAST providers should use to their advantage in negotiations. 

There is also a tremendous opportunity for lead generation, which can be crucial to combatting inevitable churn. SVODs can precisely target audiences based on their FAST choices, catering their products and messaging to those free users most likely to become loyal, paid subscribers.

Furthermore, with the support of AI and machine learning, media and entertainment company leaders can generate data that will help uncover underutilized revenue streams as FAST offerings are incorporated into SVODs.

The magic of AI is its ability to see unknown unknowns — those patterns and trends that humans aren’t looking for. As more viewers flock to FAST services, they will provide ever-increasing data on what cost-conscious consumers are looking for and how streaming services can keep them engaged. But much of this information will remain hidden to companies that don’t invest in the tech tools to see it. 

In 2023, there’s a natural opportunity for SVODs to incorporate FAST into their programming. Smart SVODs will be carving out the needed money for that investment — and will be happy to see the audience, advertising, and revenue growth that come with it.

Mark Moeder is CEO of SymphonyAI Media

HOLLYWOOD—The Hollywood studios-backed Digital Entertainment Group (DEG) trade group that tracks consumer spending on content is reporting that spending on subscription streaming services grew by a hefty 17.3% in Q3 2022 compared to a year earlier. 

Despite economic headwinds, recession worries and inflationary pressures that are crimping consumer budgets, DEG also reported that total U.S. home entertainment spending grew by 13.1% to $9.1 billion in Q3, 2022, led by $8.6 billion in spending on subscription streaming services. 

Year to date spending on SVOD services for the first three quarters of the year, were also up by 17.52% to $22.28 billion. 

Total home entertainment spending was up 12.2% in the first three quarters to nearly $27 billion. 

The group also reported that box office spending spiked as the industry recovered from COVID-19 to $2.79 billion in Q3, up 85.45% from a year earlier, and that box office spending for the first three quarters was up 195.7% to $5.98 billion. 

The full data set is available here.