Ad-Supported Streaming Tiers to Generate Over $10 Billion in Revenue by 2027, Study Predicts
Ad-supported streaming tiers from Netflix, Disney and others have collectively surpassed 100 million users in the United States and could generate over $10 billion in revenue domestically by 2027, new research from the London-based firm Ampere Analysis found.
More than 1 million Netflix accounts and around 800,000 Disney+ subscribers in the U.S. are on ad-supported tiers, according to Ampere, representing nearly 2% of each service’s total subscriber base. The firm estimates that more than 90% of Hulu subscribers are on the ad-supported tier, representing around 45 million subscriptions.
Prior to the launch of Max, Discovery+ had somewhere in the region of 10 million ad-supported accounts, while HBO Max had around 2 million, Ampere said. It added that Peacock has more than 30 million ad-supported subscribers, the most of any new U.S. OTT service, while Paramount+ has more than 25 million ad-supported subscribers in the U.S.
Ampere believes that hybrid services are “an increasingly important element of streaming service monetization, and hybrid tiers often generate more revenue per subscription than their ad-free counterparts.” It also says that the tiers “represent a way for consumers to maintain a wider array of subscriptions while economic times remain tough.”
Ampere’s latest research comes as earnings season for the major studios is in full swing.
Netflix, which recently eliminated its basic ad-free plan in the United States as it expands its password sharing crackdown, added 5.9 million paid subscribers during the second quarter of 2023 for a total of 238.4 million globally. During its upfront presentation to advertisers in May, Netflix reported that the ad tier had nearly 5 million monthly active users.
Meanwhile, NBCUniversal parent Comcast reported that Peacock had a total of 24 million paid subscribers. The streaming service, which dropped its free tier for new users in January, recently said it would bump up the price for its Premium and Premium Plus tiers to $5.99 and $11.99, respectively, which will take effect on Aug. 17. Due to certain streaming rights and contracts with content providers, some Peacock content still has ads.
Next up on the earnings docket will be Warner Bros. Discovery, which rolled out its Max rebrand on May 23 — which offers a $9.99 per month Max Ad Lite tier, $15.99 per month Max Ad Free tier and $19.99 per month Max Ultimate Ad Free tier.
Meanwhile, Paramount Global, which charges $5.99 per month for its ad-supported option, and Disney, which launched its $7.99 per month ad-supported Disney+ tier in November, will report earnings on Aug. 7 and 9, respectively.
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