I hope you like watching ads, because a recent study suggests that ads will account for a third of streaming services’ revenue in the next few years.
About 10 years ago, things looked bright for television. Streaming services like Netflix were popular but not yet dominant, there was a wide variety of great TV shows on air, and your favorite show wasn’t canceled because someone with a spreadsheet said some mysterious number didn’t rank high enough on the charts. Yet, that’s where we are now, and unfortunately, while streaming services are less convenient than ever, they’re also more expensive than ever, with all the big names regularly raising prices to make up for the fact that new users aren’t signing up.
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One of the ways companies like Netflix have tried to lure users back or attract new ones is by launching “cheap” plans with ads. I say “cheap” because you’re paying essentially the same price as you would have paid a few years ago to use Netflix, except now you’re limited to one house, the video quality isn’t as good, and just like cable TV, you’ll see ads. These ad-supported plans do seem to be the future of streaming services, as a 2024-2028 Global Entertainment & Media Outlook study by PricewaterhouseCoopers (via Variety) predicts that “advertising will account for nearly 28% of streaming service revenues” by 2028.
In 2023, 20% of streaming revenues came from ad sales, so this is definitely a huge jump. The report also states that streaming revenues overall won’t see particularly large growth between 2023 and 2028, “likely because consumers are overwhelmed by the number of streaming service options. Companies are responding by offering lower subscription fees in exchange for showing ads.”
This is obviously not for those who hate ads (hi, that’s me), and certainly suggests that this subscription ad-free approach is going to be the norm. But hey, at least it’s not cable TV, right?
