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The number of subscription video-on-demand services has increased dramatically in recent years, as has the price of ad-free alternatives and the barrier of entry for sports streaming packages like YouTube鈥檚 NFL Sunday Ticket. Those rising costs have created an appetite among consumers for cheaper, ad-supported subscription tiers, but also for FAST services and free entertainment, hence Tubi鈥檚 rise.

OTT video viewership is thriving, although its broad success will make finding untapped viewers challenging for subscription video-on-demand (SVOD) and ad-supported video-on-demand (AVOD) providers. In the realm of linear TV, digital pay TV is giving TV viewership a surprising reprieve.

This is the first installment of our quarterly 鈥淎d Spending Benchmarks鈥� series, which helps ad buyers and sellers calibrate their spending and revenue mix against the market.

Netflix鈥檚 ad-supported video-on-demand experiment got off to a bumpy start in late 2022 and early 2023, but by 2024, the US leader in subscription OTT (sub OTT) viewership had righted the ship. With its ad tier proving to be incredibly popular and its ad tech improving, we forecast 43.0% growth for 2025, reaching $2.07 billion.

Click here to view our full forecast for subscription OTT video viewers. Netflix鈥檚 ad prices are snapping back to reality. In 2023, during its first full year with advertising, Netflix CPMs declined considerably. At launch in November 2022, Netflix reportedly sought $60 to $65 CPMs鈥攁bout double the industry standard of roughly $30 CPMs. By mid-2023, its prices had dropped.

Social network video (30.0% growth) and subscription OTT video (47.3% growth) are driving 2024's expansion. Subscription OTT video revenues of $11.26 billion represent 21.5% of social video's $52.25 billion. Format dynamics:. Display advertising will capture 85.7% of the $90 billion in additional ad spending between 2024 and 2028.

Peacock and Max trail subscription video-on-demand (SVOD) leaders Netflix, Disney+, and Amazon Prime Video, and bundling allows them to add more value for financially prudent consumers.

Black consumers are tech-savvy and eager to stay up to date on the latest digital and pop culture trends.

It is one of the most common digital activities in the world, but many of these viewers won鈥檛 yet be watching OTT video via familiar platforms like YouTube or formats like paid sub OTT streaming鈥攁lso known as subscription video-on-demand (SVOD). OTT video entertainment is mainstream and available almost everywhere, but billions of people still haven鈥檛 come onboard.

And Netflix has entrenched itself as a household necessity, with one of the most diverse libraries among major subscription video-on-demand platforms. These platforms are the best deal for many Hispanic households. Only 40% of Hispanic consumers cite language as a 鈥渧ery important鈥� factor when streaming, according to Nielsen. In comparison, 70% of non-Hispanic consumers feel the same way.

So in that way they're even better positioned than many of these sub OTT or SVOD services that we've talked about. Ethan Cramer-Flood (16:22):. Yeah, I mean cable TV is too expensive, so we've had cord cutting for years. Digital pay TV we thought maybe was going to be competitive. Now that's too expensive. These things are free, and they're just sitting there waiting for you, right?

Subscription OTT (sub OTT) will increase by 6 minutes this year, while social network and digital audio time will increase by about 2 minutes each. Digital gaming and messaging will grow, but by less than 1 additional minute each. TV, meanwhile, did not lose as much time last year as we predicted, but it is still declining.

The recent proliferation of AVOD options among major subscription OTT providers has ensured the CTV boom will continue at least through this year. Moderation is on the horizon, but CTV will remain a massive category. Much of the transition to ad-supported CTV has already happened. This will likely be the final boom year.

Importance of free content: The saturation and rising costs of (ad-free) subscription video-on-demand (SVOD) services have led consumers to seek more affordable options for entertainment. Roku makes connected TV (CTV) devices, runs an operating system, and produces original content, giving its business several pillars to stand on.

Netflix鈥檚 US audience is saturated, as the service will reach more than three-fourths of US subscription OTT users this year. To generate more revenues from its consumers, Netflix has restricted password-sharing and continued to raise subscription fees. Netflix also adopted advertising after avoiding it for years. Amazon will have a big year in streaming.

The vast increase in video advertising, including an influx of ad tiers in subscription OTT, makes sense; it is effective. But its growth could also obscure the large audience and engagement that audio channels enjoy. Audio advertising is small but rising thanks to digital. After a slight dip in 2023, audio advertising will grow a modest 1.7% in 2024 to reach $17.61 billion.