Two years after Netflix launched its ad-supported service , it has become a popular pricing option for its 70 million subscribers , and the trend is spreading across the streaming industry, becoming a second-best revenue driver behind ad-free subscription plans.
Even if the introduction of ad- supported services succeeds in retaining members (downgrade options), profitability per customer will fall . Whether or not the loss in profitability can be offset by advertising revenue will depend on the value of the media, so the more members who choose ad-supported services, the higher the advertising cost will be.
In 2021 , YouTube introduced a " Lite " plan with advertising and a lower subscription fee , but announced its withdrawal after a two- year trial run. However, it resumed testing in some countries in October 2024. Prior to that, medical SaaS company Practice Fusion introduced a plan that cut subscription fees in half, but it has since been removed due to concerns about conflicts of interest with medical quality.
The environment surrounding the advertising business is evolving dramatically with the use of first-party data through subscriptions , advances in personalization, and the efficiency of creative production through generative AI . The success of ad- supported content is beginning to expand beyond the boundaries of the streaming industry, opening up new advertising markets that would have been impossible in the past.
Report format: PDF (4.5MB)
Original data: PowerPoint, 63 slides, A4 size