Over the last few years, we’ve seen streaming channels come into prominence agt a rapid pace, thanks to the COVID pandemic and thanks to them basically adopting what made TV successful early on: ad revenue.
Almost every single streamer has launched or is close to launching an ad-based tier that is set to help them rake in money.
London-based firm Ampere Analysis released a study that found that these ad tiers from various streamers have over 100 million users in the United States (collectively) and very possibly will generate $10 billion in revenue in the US by 2027.
Over a million people have subscribed to Netflix’s ad tier, and Disney’s tier is nearing the same mark. But streamer Hulu is estimated to have around 90% of its subscriptions in the ad-tier, which represents around 45 million people.
These ads are generating lots of money for streamers as companies work to get their commercials in front of the most amount of people possible.
It’s expensive to make and acquire film and TV to put on these streamers, so the ads have to offset the costs. This is all part of a greater monetization strategy for streamers who have had a hard time staying profitable and gaining new customers when their only recourse was to raise the rates of subscription.
But adding ads is just repurposing the way we’ve seen TV altogether, which sort of takes away from the innovative idea of streaming.
Still, that may benefit many viewers, who are looking for the best, and lowest-cost option to them. And for streamers, making an extra $10 billion over the next five years will help cut their deficits.
These major streamers are all working to improve their stock prices and show growth every quarter, which in Hollywood is a much harder track to find. In order to do that, it does feel like they’ve gone back in time instead of continuing to try to disrupt the industry by taking chances or looking for a new way to do things.
But the monetary reward is coming.
We’ll keep an eye on this as it develops.
Author: Jason Hellerman
This article comes from No Film School and can be read on the original site.
