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Price hikes for ad-free tiers give streamers an opportunity to onboard consumers to their ad-supported tiers, which generate higher revenues. Streamers are also looking for lower-cost onboarding options: Netflix and Max are offering a bundle via Verizon that offers even cheaper access to both service鈥檚 ad-supported tiers.

Building up: Amazon announced that ads were coming to Prime Video last month, moving into ad-supported streaming at a time when most major competitors had already begun establishing a foothold. That leaves Amazon behind in the race to attract spending, but its broader ad ecosystem gives it a unique edge. The company鈥檚 larger requests were apparently not received well by some advertisers.

And streaming services that offer both ad-supported and ad-free tiers will appeal to more consumers. While the idea of ad-supported streaming might have seemed unfavorable at first, the research suggests that consumers are more flexible than initially thought. The streaming landscape is evolving rapidly, and the rise of ad-supported streaming platforms is a testament to this.

It鈥檚 been a year since Netflix launched its 鈥淏asic With Ads鈥� tier, joining an increasingly cluttered landscape of ad-supported streaming platforms. Netflix leveraged a year of solid connected TV (CTV) ad spend growth, cost-conscious consumers, and Hollywood strikes that emphasized the value of a deep existing catalog to grow its ad supported plan to 15 million global monthly active users, according to a company post. Here鈥檚 a look at what鈥檚 new, what鈥檚 working, and what needs more attention at Netflix.

The majority of subscription video-on-demand sign-ups on Peacock and Hulu are ad-supported, according to Antenna, accounting for 69% and 58% of overall subscription plans, respectively.

In comparison, time spent with connected TV (CTV) and subscription over-the-top (sub OTT) is still growing. This year, daily social time among users will grow at less than half 2022鈥檚 rate. The days of explosive gains for social video are in the past.

Netflix launched ad-supported plans across 12 countries in November 2022. Subscribers in Latin America reported being reluctant to downgrade their current plan at the time, but Netflix is banking on attracting new customers, not catering to its current ones.

On today's episode, we discuss why Disney+ lost around 3 million subscribers, how much its new ad-supported tier can move the needle, and whether The Walt Disney Co. is more likely to buy the rest of鈥攐r sell鈥擧ulu. "In Other News," we talk about how connected TV (CTV) viewers feel about "enhanced" ad formats and what a new category of video called "accompanying in-stream" is all about. Tune in to the discussion with our analyst Paul Verna.

Ad-supported viewing is the default for free services like Tubi and Pluto TV. And most Prime Video, Hulu, Peacock, and Paramount+ viewers choose ad plans. But fewer than one-fourth of Netflix viewers are ad supported, and most Max and Disney+ viewers are ad-free, too. Taken together, viewing patterns don鈥檛 always translate to advertising patterns.

Amazon will get a growth boost from its OTT video service. Amazon will benefit from a new kind of growth model in 2024, thanks to its ad-supported video-on-demand initiative with Prime Video. By the end of the year, Amazon will have transitioned most of its OTT viewers to an ad-supported subscription tier in the US, Canada, Germany, the UK, France, Mexico, and several other major markets.

CTV broadly, and subscription over-the-top (sub OTT) specifically, are doing extremely well, but life is tough for individual players because the competition is so fierce. Dozens of service providers will vie for a slice of this year鈥檚 $26.92 billion in spending.

Here鈥檚 another way to quantify Netflix鈥檚 massive userbase: It will have more viewers than all ad-supported streaming services combined, excluding YouTube and TikTok, through 2026. Total AVOD (ad-supported video on-demand) viewership will crack half the US population in 2026. But that will be 5.1 percentage points lower than Netflix鈥檚 penetration rate.

All eyes are on streaming. Last year, non-pay TV viewers surpassed traditional pay TV viewers in the US, per our forecast. Years of streaming platform proliferation are over, yielding to consolidation and fragmented ad measurement. Bundles between streaming platforms and partnerships with retail media platforms are forming, leaving media buyers with a headache over how to strategize.

Netflix tallies its ad-supported subscriber count ahead of Upfronts: A survey shows it could have 22 million US subscribers as it enters an Upfront period rife with competition.

Prime Video mulls ads, but football paints a worrying sign: The streaming service is planning an ad-supported tier despite its video ad growing pains.

The region鈥檚 sub OTT market is primed for growth. With 6.6% growth, it will be home to the second-fastest-growing base of sub OTT video viewers in the world this year, behind the Middle East and Africa, per our forecast. Sub OTT viewership will pass the 200 million mark in 2025, fueled by net viewer gains in Brazil and Mexico, Latin America鈥檚 two biggest markets.

As ad-supported TV and streaming services become more popular, ad variations are becoming more crucial. Through small, tactical tweaks, a holistic campaign approach, and experimentation with shoppable formats, it doesn鈥檛 have to be a costly or daunting endeavor.

That increase is being driven by consumers watching more subscription over-the-top (sub OTT) services such as Amazon Prime and Netflix, more ad-supported video-on-demand (AVOD) services like Hulu and Tubi, and more YouTube. CTV time spent accounts for 84% of time spent with 鈥渙ther connected devices.鈥� This forecast features eMarketer鈥檚 first estimate of US adults鈥� time spent with CTV from 2019 to 2024.

It鈥檚 an ad business: The ad-supported subscription offering continued to gain traction, unlocking a new revenue stream. The tier had a 65% rise in quarter-over-quarter adoption; nearly 4 in 10 sign-ups in markets offering ads were for an ad-supported subscription. We forecast the company will see a 75.2% surge in viewership for its ad-supported tier this year.