Advertising-supported tiers made up 46% of streaming subscriptions at SVOD platforms that offer both options — with and without ads — at the end of March, up by 33%, or 7 percentage points, year-on-year. Over the past nine quarters, ad plans drove 71% of net subscriber additions for premium SVOD (streaming video-on-demand), according to the latest State Of Subscriptions report from leading market research firm Antenna.Antenna said there are almost 100 million subscriptions ad plans in the U.S. market, not including Amazon Prime Video. Some 65% of them are new subscribers.Meanwhile, ad-free subscriptions eased slightly, by 0.1% in Q1, said the study, which looks at Discovery+, Disney+, Hulu, Max, Netflix, Paramount+ and Peacock premium SVOD services.The ad bonanza was on full display at Upfront presentations to advertisers in New York last week. Netflix announced its ad-supported tier hit 94 million monthly active users across the world, up from 70 million last November. Executives at rebranded (again) HBO Max talked about making major strides on ads. Peacock unveiled a robust lineup. Amazon said Prime Video reaches 130 million ad-supported subscribers in the U.S. Disney streaming platforms reach a total of 164 monthly active users, its ad chief said, with Disney+, Hulu and ESPN+, which will soon launch a new flagship app.More Antenna stats: some 75% of streaming subscribers have tried an advertising plan in the past four years. Of consumers who have been offered an ad plan two or more times, 86% chose ads. Ad-tier subscribers show almost no demographic skew and they are just as loyal as ad-free subscribers, the study said, debunking two key concerns about audiences who would choose ads in streaming.Two years ago, there were many fewer ad-supported plans and only about half of the streaming population had ever tried one, Antenna noted. “Given that TV had always been the foundation of the modern advertising business, the state of affairs was unsettling for Madison Avenue and left CMOs searching for new ways to get their messages out. But today, we are in a very different place,” said the report by the firm’s founder and CEO Jonathan Carson and director of strategy Brendan Brady.“Advertising has reached a remarkable place of maturity in streaming … in a very short period of time.”Everyone wins, it said. “Streamers can build a dual-stream business model and expand their addressable market by offering a lower priced tier for more casual fans. Brands can transition their highly successful TV advertising strategies to streaming. And consumers can afford more services by taking ads on some of them,” it said.Antenna noted in another study earlier this year, however, that prices of all streaming options have been rising, from ad-free to ad-light to ad-supported tiers.One event can change the calculus. Ad-supported tiers captured 57% of Q1 gross adds, down 1 point from the year before due to the surge in ad-supported acquisition around Peacock’s exclusive NFL AFC Wild Card Game in Q1 of 24. Streamers have been snapping up live sports.Drilling down, 3 in 4 consumers who face an choice of ads or no ads chose ads. Only 14% of those faced with a choice never chose ads.Some 11% of ad-tier subscribers switched directly from an ad-free plan. Some 23% were “win backs,” who had canceled an ad-free plan and later returned to an ad-supported plan. A hefty 65% were new users that Antenna had not measured as having subscribed to a service before joining its ad tier.Ad-free tiers do win in terms of churn, consistently showing lower rates than ad-supported plans. Antenna attributed this “loyalty advantage” to “long-tenured Netflix subscribers who represent a meaningful portion of the ad-free churn denominator and are highly unlikely to cancel.”
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