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US streamers will see $66.23 billion in OTT subscription revenues this year, per our December 2023 forecast. Most of that money will come from the biggest players鈥擭etflix, Disney+, Hulu, YouTube, and Paramount+鈥攂ut over a third ($22.91 billion) will come from other streamers. This potential subscription and ad revenue are why brands like Chick-fil-A and the Dallas Stars NHL team are launching their own streaming services. Here are the driving forces behind the growth of these niche platforms.

The ad-supported experience or the ad-supported content on streaming is much broader than it was a few years ago when much less than half of the time spent streaming was ad-supported. A few years ago, that was like almost a niche. Marcus Johnson (00:48):. Hey gang, it's Thursday, June 20th. Ross and listeners, welcome to the Behind the Numbers Daily and eMarketer podcast. Made possible by Roundel.

When Netflix first rolled out its ad-supported tier in late 2022, its CPMs (the cost to reach 1,000 users) were nearly $60, per our data. Disney+ CPMs were slightly lower at $50, but still much higher than Hulu鈥檚 at $24.44.

Ad-supported tiers on Disney+ and Hulu will increase by $2 per month starting in October. What it means for advertisers: Having viewers engage with ads may give advertisers a chance to create memorable experiences, maximize engagement, and improve brand recall. Instacart鈥檚 鈥渋nspire鈥� ads boost product discovery. Consumer packaged goods (CPG) brands including Mondelez and The J.M.

Consumers seem receptive to ad-supported travel experiences. "As a consumer, I'm more than willing to sit through 30, 60 seconds of ads to get free Wi-Fi," our analyst Arielle Feger noted. 2. Intermediaries are partnering to enhance offerings. Companies like Uber, DoorDash and Lyft that sit between consumers and merchants are finding ways to combine their data and reach.

That's a good question and that is of course subscription OTT for the most part, the streaming wars, we are spending more and more and more time whether we're paying for it or whether we're going to the free services or the ad-supported tiers now. More and more time actually in front of that big TV in our living room while we're sitting on the couch, so we're sort of come full circle.

Discovery's Max streaming service said it will keep CNN Max news and its B/R sports offerings free on higher tiers of its service, but they will no longer be available on its cheapest ad-supported basic tier. And that was David Bloom of Forbes. Basically what they're saying there is if you are paying for the premium tier, you'll get news and sports.

Just 20.4% of Max viewers are ad-supported right now, but that portion will grow in the years to come, according to our forecast. Meanwhile, Netflix is doing well as subscriptions soar past expectations. The streamer is increasing pricing and investing in new revenue streams like physical stores. Use this chart:. Compare consistency of content on streaming platforms.

Amazon introduced ads to its Prime Video streaming service this year, creating an audience of 130.4 million ad-supported viewers, per our forecast. While Amazon lacks the store footprint and grocery business of competitor Walmart, it remains the dominant RMN in the US. Walmart: Last year we said Walmart was working its way up the retail media ladder, and this year it certainly has put in the work.

Many services are also inclined to use bundling to add people to their ad-supported tiers. Watch the webinar. This was originally featured in the 蘑菇AV Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.

As privacy litigation and enforcement heat up, the largest platforms, like Meta鈥檚 Facebook and Instagram, are having their ad-supported business models scrutinized and may soon have less data at their disposal, or be forced to share their data with competitors. And the open web is about to become the Wild West again. Made-for-advertising (MFA) inventory is ballooning.

Netflix's co-CEO Greg Peters recently said that over 25% of new signups select the ad supported tier. Jeremy Goldman:. Yeah, no, and it's one of those things where why did they not have more people in the ad supported tier? It's just simply because it's newer. You are going to get more people who are going to opt in.

These are the paid ones, so if you add up all of the ways that you can watch digital video on your CTV or on your laptop or on your desktop, that would include all the free stuff, that would include YouTube, FAST services as we call them, free ad-supported TV. We're not talking about that. I'm just talking about the big streaming services that you pay for, whether ad-supported or not.

Over the next few years, display will start to play a larger role in retail media鈥攁nd vice versa鈥攈elped along as Amazon builds out its ad-supported tier of Amazon Prime. Retail media will be the source of most search ad spending growth in the coming years.

As digital services expand, carmakers and partners can offer subscriptions, which also opens up opportunities for ad-supported free or reduced-rate plans. Tax incentives and carmaker investments supercharge electric car growth. The Inflation Reduction Act (IRA) of 2022 drives up EV sales.

That could change if Apple launches an ad-supported tier, which seems plausible given its embrace of live sports. Whatever happens, it seems likely that Apple, Netflix, and other tech titans like Amazon, YouTube, TikTok, Snap, and Meta will come to personify the upfronts just as TV networks have since the 鈥淢ad Men鈥� days.

That's folks watching ad free and ad supported streaming services. All right, question two. Ross and Ethan tag teaming against Blake for this one. The next big wearable category, is it rings? Is the question.

I would like to move Amazon up to number two for this month because, in addition to reporting a really strong Q4 results for last year, they basically dominated the holiday season, but, looking ahead, on January 29th, they launched an ad-supported tier on Prime Video, which essentially defaulted all of its 160 million-plus Prime viewers into an ad-supported tier.

And I think it's not inconceivable that in the next couple of years, maybe a retailer that doesn't think too clearly about it couldn't find itself in a kind of a PR bind because somebody who searches for something on a retailer's website then gets served a bunch of ads reflecting that search while they're watching TV and see something on an ad-supported streaming service in a way that really sketches them

If a large chunk of Netflix users went to ad supported and they raised their ad loads up, that would reduce it. So it might not end up being a fourth when all things are set and done, but on the current trajectory, that's what we're looking at. Marcus Johnson (05:46):.

We're starting to ramp up a lot more ads supported inventory, but it's going to take some time for that transition to streaming TV to continue and for more ad inventory to become available. So it's just going to take some time. I think we have it under a billion dollars this year, but something like over 5 billion by 2027, a nice number, but not game changing, but what happens after that?

The ad supported tier is another big boost to that, but it's still really new.