As linear networks continue to decline, the studios are turning to adding ad-supported tiers onto the streaming services to replace that income, as they look to make their streaming services more profitable.

According to some new research from the London-based firm Ampere Analysis, ad-supported tiers on streaming services could generate over $10 billion in revenue in the United States by 2027.

Currently, 800,000 Disney+ subscribers in the United States have the ad-supported tier, representing only 2% of the total subscribers. This is why Disney plans to roll out the ad-supported tier internationally later this year, to drastically increase its ad revenue.

Meanwhile, Hulu is almost exactly the opposite, as 90% of its subscribers are on the ad-supported tier, which is around 45 million subscribers in the United States. By comparison, Netflix has about a million subscribers on the ad-supported tier, while Paramount+ has more than 25 million subscribers on its ad-supported tier, and Peacock has 30 million ad-supported subscribers in the US.

This chart shows the drastic difference between HBO Max, Disney+ and Netflix ad-supported subscribers, when compared to the others.  All of which launched ad-supported tiers much later.  But also, it’ll be interesting to see how the merger between Discovery+ and HBO Max into Max has mixed things up.

Ampere believes that hybrid services are “an increasingly important element of streaming service monetization, and hybrid tiers often generate more revenue per subscription than their ad-free counterparts.” It also says that the tiers “represent a way for consumers to maintain a wider array of subscriptions while economic times remain tough.”

Later this year, Disney will make Hulu content available within Disney+ in the United States for Hulu subscribers, as part of its one-app experience. And eventually, Hulu and Disney+ will merge together, which will supercharge a boost of subscribers to Disney+ but, more importantly, drastically shift Disney+ to becoming more profitable.

With so many different streaming services and during a cost-of-living crisis, more people are going to turn to an ad-supported tier, to have access to more content, at a cheaper price, which will make the streaming companies more profitable.   While many subscribers have enjoyed a low-cost subscription cost, with no commercials for years, this option will become more expensive, resulting in more people shifting to an ad-supported tier.

Do you subscribe to an ad-supported tier on a streaming service?  Let us know on social media!

Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

View all posts