Netflix dominated headlines earlier this year with news of significant Q1 subscriber losses globally - down by 200,000 in the US alone - losses that led to the pioneering streaming service's stock price to fall by 35% in just one day. Yet less than a month earlier, Insider Intelligence reported that OTT video services in the US are expected to attract over 12 million new viewers by 2026, a third of those just this year.
Clearly audiences continue to consume streaming TV and video in growing numbers, but if they're not watching Netflix, what are they watching? Increasing market fragmentation means viewers are spoiled for choice, even as subscriber fatigue and rising costs makes audiences more discerning about which services they choose to keep, and which they choose to let go.
As cost-conscious viewers weigh the price of multiple subscriptions against the minor inconvenience of ad breaks, lower-priced and free ad-supported platforms are becoming increasingly attractive. At the same time, premium subscription services are finding it difficult to compete, both against each other and against those more affordable options. And declining subscription numbers mean declining revenue - revenue that is essential to produce the must-see, exclusive content streaming services have become known for.
Make no mistake - with streaming services reporting ad revenue growth rates as high as 31% year-over-year, advertising is coming to some of your favorite, currently ad-free streaming services, if it hasn't already. Netflix floated the possibility of a lower-priced, ad-supported subscription tier when reporting their declining numbers. HBO Max launched an ad-supported tier last year, and Disney+ is expected to do the same later in 2022. And in April, Amazon rebranded IMDb TV (formerly Freedive) to Freevee, a free streaming service available without a subscription through Amazon Prime. To expand revenue opportunities and audience reach even further, Freevee has also created a dedicated Apple TV app, in addition to apps for Roku, Android, Xbox, and PlayStation, and other streaming services are doing the same.
And all of that is in addition to the Free Ad-Supported Streaming TV (FAST) channels already attracting large numbers of viewers. The growth in ad-supported streaming offers advertisers exciting opportunities, in terms of both expanded reach and improved targeting. Technologies are being developed to simplify the ad-buying experience for advertisers as streaming platforms continue to evolve their business models.
In the meantime, there's no need for advertisers to wait for major streaming players to enter the ad-supported arena. There are plenty of streaming ad opportunities available now, many of them offering addressable advertising, making them a good testing ground for the growth to come.
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Netflix dominated headlines earlier this year with news of significant Q1 subscriber losses globally - down by 200,000 in the US alone - losses that led to the pioneering streaming service's stock price to fall by 35% in just one day. Yet less than a month earlier, Insider Intelligence reported that OTT video services in the US are expected to attract over 12 million new viewers by 2026, a third of those just this year.
