Ad-Supported Streaming Will Continue Growing in 2025
ABSTRACT
Major streaming services are seeing a big increase in ad-supported subscriptions, with Hulu leading the pack at a projected 65% for 2025.
Nearly 40% of Disney+ subscribers in the US and Canada are expected to choose the ad-supported tier by next year, a significant jump from just 3% in 2022.
A whopping 84% of Peacock subscribers are currently on the ad-supported plan, making it the service with the highest ad-tier adoption rate. Peacock also boasts the most significant growth in subscribers, at 40 million users.
The upfront advertising market is shifting towards streaming, with Disney expecting nearly half of its 2024-2025 sales to come from streaming and digital platforms. But despite the growth of ad-supported streaming, linear TV still holds the majority share of upfront ad revenue.
Ad-supported streaming services are on the rise, and new figures are revealing just how high they’ll go. According to Madison & Wall’s Brian Wieser, the ad-supported subscriber percentages for major streaming services are set to climb next year. 36% of Disney+ users will opt for ad-supported plans, while Hulu will have a hefty 65%. And the rest of the major streamers will also see more ad-supported users — Max will hit 28%, Netflix 15%, Paramount+ 58%, and Peacock will lead the pack with a whopping 84%. These numbers have significantly jumped since 2022, when Disney+ was at a mere 3% and Netflix had no ad-supported users at all. In terms of sheer numbers, Disney+ now has 19 million ad-supported subscribers, Hulu boasts 37 million, Max has 8 million, Netflix counts 12 million, Paramount+ reaches 28 million, and Peacock tops the list with 40 million.
While ad-supported may be on the rise, the upfronts have shown that most marketers are still allocating the majority of their upfront shares to linear. Still, that’s likely to change moving forward. Disney, in particular, is quite optimistic on streaming, projecting that 45% of its 2024-2025 upfront ad sales will come from streaming, CTV, and digital platforms. Last year, Disney raked in $9 billion from upfront advertising, with only 40% of that coming from digital and streaming. And it looks like the rest of the industry as a whole isn’t far behind, with an estimated $27.1 billion in upfront ad revenue for the 2023-2024 season, $8 billion of which will be from ad-supported streaming services.
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