With Disney+ set to launch a lower-priced ad-supported subscription streaming option on Dec. 8, the SVOD market offering content with targeted commercials is reaching scale. Currently, Hulu, Netflix, Paramount+, Peacock, Discovery+ and HBO Max offer subscription tiers with ads.
Parks projects the number of households using ad-supported streaming services will reach 52 million in 2027, a compound annual growth rate of 6.7%. That compares with about 450 million SVOD subscriptions over the next five years. There were about 338 million SVOD subscribers at the end of 2021.
“Around one-third of households are using at least one ad-supported streaming service,” Elizabeth Parks, president and CMO of Parks, said in a statement. “A free, ad-supported option is becoming a standard strategic move for streaming services.”
Parks Associates’ fifth annual Future of Video: OTT, Pay TV, and Digital Media will be held Dec. 12-14 at the Marina del Rey Marriott in Marina del Rey, Calif. The event begins with pre-show research workshop, “OTT Market & New Era of Video Consumption.” The workshop will feature in-depth sessions analyzing hybrid business models, measurement challenges, consumer trends in service stacking and viewing habits, and new strategies and innovations that can improve the user experience and reduce churn.