Content is no longer king
As of the fourth quarter of 2022, over 60 percent of U.S. consumers were using HVOD platforms. The hybrid monetization model has become an indispensable part of the video streaming market, as the players need to stay adaptable in light of economic uncertainty. Given this budgetary pressure, a survey from September 2022 found that price became the key reason for consumers to sign up for a streaming service, outpacing specific and original programming. Another survey found that a cheaper price was the most named reason why Netflix customers would keep their subscription if the platform provided an ad-supported plan.The future belongs to hybrid streaming
Streaming platforms such as HBO Max, Paramount+, and Hulu already proved that it pays off to provide a choice between ad-supported and ad-free content, with a survey from mid-2022 revealing that users believe both options offer good value for money. Although most customers are expected to continue with their ad-free plans, the availability of a cheaper alternative could drive users to switch, and this will also affect Netflix and Disney+ with their new ad-supported programming. A forecast from late 2022 suggested that the former may have over 60 million hybrid subscribers by 2028, while the latter could accrue more than three times that amount. Furthermore, ads are expected to contribute to increase streaming companies’ income over time. Netflix’s revenue growth, for example, is forecast to be higher with an ad-supported tier than without and would therefore compensate losses of only-SVOD subscribers.
