Streaming Is Now (Mostly) Ad-Supported

We’ve seen many streaming platforms shift to offering ad-supported services recently. Now the data is in: the majority of new streaming subscribers are heading straight for those ad-supported tiers over premium offerings. Our Blake & Wang P.A. Entertainment attorney, Brandon Blake, takes a closer look at the data.

Brandon Blake

Nearly Half of Users

The data, from market research firm Antenna, shows that not only are the majority of new subscribers opting for ad-supported tiers, but those same subscription tiers now account for almost half of streaming plans among US subscribers. That’s pretty powerful growth, given that ad-supported plans barely existed when we entered the 2020s. 

Antenna’s latest report on the streaming market suggests that there are now 110M ad-tier streaming subscriptions in the US. Interestingly, this excludes Prime Video, which has been ad-first by default since early 2024. If this data is accurate, that means that 48% of US SVOD subscriptions are now on ad-supported tiers. This is a 9% increase in just 2 years.

Notably, a majority (think 64%) of first-time subscribers went for ad-supported options, while another 11% of existing subscribers have swapped a premium sub for an ad-backed option. 25% of respondents had actively cancelled a subscription and chosen to re-subscribe on the lower-cost tiers. 

Intriguingly, however, cord cutters are not among them. An impressive 57% of those dropping off of a multi-channel service are choosing either to return to a premium (read: ad-free) streaming option or simply staying away altogether within the 90-day window after their first cord cutting. 

Blake & Wang Lawyer

Streaming’s Growth Driver

This will, of course, not be news to the streaming platforms behind those ad-supported offerings. We’ve seen a major focus on ad-tier offerings in the last few years, enough that many feel we may even be returning to something that looks a whole lot like the old broadcast model, ad breaks included. 

In the first quarter of this year alone, ad-supported subs have made up 59% of the gross subscriber additions across platforms where an ad tier is an option. That works out to over 75% of net additions when new subscribers and cancellations are benchmarked against each other. That’s an awful lot of streamers, including not just Discovery+, Disney+, HBO Max, Hulu, and Netflix, but also Fox One, Paramount+, and even Peacock. 

While these ad-supported options often result in less net revenue, given that they come at a lower cost to the subscriber, the recent boom in SVOD advertising gives streamers plenty of incentive to accept the lower cost and benefit from the much stronger revenue stream that advertising creates. In fact, we’ve seen many a streamer actively nudge users towards ad-supported tiers, simply because they create a higher net worth for the platform.

So, it seems that those suggesting that the age of streaming maturity will look a lot like the cable heyday are not wrong. As customers are forced to tighten their belts and look at their budgets, ad-supported streaming is becoming the default, and streaming platforms are more than happy with the accelerated revenue this shift creates.