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Just How Much Reach Do Ads On Streaming Services Have?
Netflix headquarters on April 20, 2022 in Los Gatos
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Justin Sullivan/Getty Images
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Getty Images North America
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Topline:
Why it matters: Ad-based streaming represents a meaningful part of the entertainment industry's hopes to recoup losses from the deterioration of the cable business by creating a new business with revenue from both subscriptions and advertising.
As streaming services seek billions in advance advertising commitments from brands for the ad-tier versions of their offerings, the challenge of giving those marketers the kind of reach they need has come to the fore.
Ads reset the streaming wars: According to an exclusive analysis by LAist’s Entertainment Thursday partner The Ankler, when it comes to serving advertiser needs, Amazon’s Prime Video should likely be considered the top streaming service given that it made advertising opt-out for its 115 million U.S. Prime subscribers (note that Amazon doesn’t provide any insight into how many of them watch Prime Video).
Hulu, which was the first streaming service to offer an ad-supported version, is in a stronger position than Disney+. NBCUniversal’s Peacock, long considered an also-ran in streaming, looks more robust with an estimated 27 million subscribers viewing ads. Meanwhile, Netflix — far and away the streaming subscription leader — only added advertising in late 2022 and has an estimated 7 million to 10 million U.S. and Canadian ad-tier subscribers.
Comparing streaming to cable and broadcast: Approximately 70 million homes in the U.S. have cable (and broadcast TV is higher than that). So streaming has a ways to go to replace the value of broadcast and cable to advertisers, but those declining assets are pressuring streamers to embrace live sports and other ways to grow quickly.
For more . . . read the full story on The Ankler.
This story is published in partnership with The Ankler, a paid subscription publication about the entertainment industry.
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