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Will AVOD, Price-Slashing, and Localized Content Keep the Streaming Giant in the Lead?

On today's episode, we discuss the significance of Netflix saying it has 5 million monthly active users on its ad tier, the biggest impacts of the new streaming service Max, and how much noise a combined Paramount+ and Showtime offering can make. "In Other News," we talk about the current state of esports and what the best connected TV (CTV) ad formats are. Tune in to the discussion with our director of Briefings Jeremy Goldman.

More subscribers equals more revenues. We project that Spotify Premium will boast 53.3 million paid US subscribers this year. By contrast, YouTube Premium (which includes YouTube Music Premium) will have 40.5 million, Apple Music will have 39.9 million, and Pandora will have 6.3 million.

Netflix estimated in 2023 that more than 100 million households worldwide were sharing passwords, giving the company a long runway to convert formerly piggybacking users into subscribers. The WWE deal: Netflix鈥檚 first-ever subscriber loss came in spring 2022, forcing the company to opt out of billion-dollar bidding wars for streaming rights.

CNN isn鈥檛 done with streaming: In a memo announcing layoffs, CEO Mark Thompson said a standalone streaming service is coming.

Streaming apps have made the user experience seamless, allowing viewers to pick up where they left off on other devices and in other locations. YouTube is by far the most watched video platform. Its ad-supported content has made it a dominant platform in digital video advertising, accounting for a sizable chunk of Google鈥檚 business in Canada.

Given Netflix鈥檚 reach鈥攖he platform has over 300 million paid subscribers鈥攁dvertisers could tap into a massive audience and leverage tools more likely to convert listeners into buyers.

We expect Netflix鈥檚 new ad-supported subscribers to watch the service somewhat less than the cohort paying full price. The same story will play out with Disney+: We expect its time spent to decline by 1.0% this year thanks to its less-engaged ad-supported viewers. Estimates for Hulu and the other sub OTT services were not affected by the writers strike.

The news: Most mobile apps fail to make $1,000 in monthly revenues within their first two years, placing pressure on developers to acquire and keep paid subscribers. The window of time to capture a paying user is tight: 82% of subscription trials start the same day a user installs an app, per RevenueCat鈥檚 2025 State of Subscription Apps report.

Sustaining revenue gains in 2025 could require adding more engaging and personalized features to keep subscribers around for any future price hikes.

X also continues to offer early access to enhanced Grok features as a perk to some X Premium subscribers. In February, X rolled out a Grok-powered AI ad interface for SMBs, which automates ad creation and analyzes performance.

Subscription OTT streaming is one of only a few media categories still seeing meaningful time spent growth in the US. The major platforms are heading in different directions, however.

Streaming services are leaning more on advertising than they used to, resulting in increased overall ad spending but lower ad prices.

This is to be expected given that sub OTT streaming services like Netflix, Hulu, Amazon Prime Video, and Disney+ still mainly rely on subscriber fees and are only cautiously opening up to advertising. Among media that is entirely ad-reliant, radio is by far the worst off in terms of its relationship between time spent and ad revenues. Within digital audio, podcasts face the same discrepancy.

Use this chart: Publishers can use this chart to understand what audiences care about when it comes to news content鈥攁nd over-reliance on AI could lead to a subscriber hit. Related 蘑菇AV reports:. Generative AI for Media Sellers (蘑菇AV subscription required). Generative AI Trends to Watch in 2025 (蘑菇AV subscription required).

It ranked as the most popular paid streaming service across all demographic cohorts and in each of the eight Latin American countries surveyed. Netflix鈥檚 vast library of local, regional, and international content keeps subscribers coming back for more. Local players fail to break into the top five paid streaming services.

CPMs tend to be higher when ad loads are low, and Netflix runs fewer ads per hour than other streaming services. Ad-supported Netflix viewers saw 3.5 ads per hour in Q4 2023, while all streaming services combined averaged 13.1 ads per hour, according to MediaRadar. As long as ad loads remain low, prices will remain relatively high.

An influx of news personalities and social creators have joined Substack鈥檚 user base, helping to boost the platform to 5 million paid subscribers, up from 3 million at this time last year. Substack is also investing in visual content鈥攊t launched a scrollable video feed, capitalizing on interest in short-form video and positioning itself as (another) TikTok alternative.

Netflix's successful password-sharing crackdown brought in many new subscribers, but these new subscribers spend less time with the service than established users. "Those new subscribers don't seem to be watching as much Netflix as the old subscribers did," Cramer-Flood explains.

On today's podcast episode, we discuss how Spotify reached sustained profitability, what a 鈥渄eluxe鈥� tier might look like, and where the audio streaming giant goes from here. Tune in to the discussion with host Marcus Johnson and analyst Daniel Konstantinovic.

Netflix relies more on ad-free viewers than any comparable streaming service does. Just 2 in 10 US Netflix subscribers see ads, per Q1 2024 Hub Research data. Our forecast shows penetration of US Netflix ad-supported viewers may be even lower, at 7.5%. But that figure is rising as more viewers trade down to its ad-supported tier or create new subscriptions at a lower cost.

In 2022, Netflix faced net subscriber losses for the first time in the modern streaming era. It spent the next year rolling out a lower-cost ad tier and abolishing password-sharing. These pivots led to subscriber growth, but at the expense of total viewership. Now that the dust has settled and the ad tier experiment is working, we expect a rebound for the sub OTT leader this year (5.1% viewer growth).

The company saw a 75% quarter-over-quarter increase in subscribers to its Premium Pages for small and midsize businesses. LinkedIn鈥檚 ad revenues are on a longer-term upward trend. Per our forecast, global ad revenues are expected to grow from $8.06 billion in 2025 to $9.57 billion by 2027.