[Discussion] The Surge in Free Ad-Supported Streaming: 1 in 3 Americans Are Tuning In

[Uncrowned Guard]

The streaming landscape is undergoing a noticeable shift, with free ad-supported TV streaming (FAST) platforms gaining momentum among American viewers. As revealed by Samba TV's most recent State of Viewership report, nearly 33% of U.S. streamers have now embraced FAST services.

Amazon’s Freevee Leads the Pack

Among the platforms enjoying this surge, Amazon’s Freevee stands out, experiencing an impressive 11% YoY growth in viewership during the first half of 2023. Amazon's strategic push into the FAST segment, including transferring a plethora of Prime Video's Amazon Original titles to Freevee and introducing 23 new ad-supported channels in partnership with Warner Bros. Discovery and MGM, seems to be paying dividends.

Close behind, Pluto and Tubi reported growths of 7% and 6% respectively, while the Roku Channel and Crackle witnessed a 5% rise.

Contrasting Fortunes: SVOD Streamers Witnessing Mixed Results

The upsurge in FAST viewership has had contrasting effects on SVOD (subscription video-on-demand) services. Netflix recorded a 1% YoY dip, and Peacock's decision to terminate its free tier might have contributed to its 2% viewership decline. Meanwhile, even with Amazon’s aggressive push into FAST, Prime Video observed a modest 3% YoY growth.

Ad-Supported Options Gain Traction Over Premium Subscriptions

Consumers seem to be leaning more toward affordable streaming alternatives. Samba TV's findings indicate that 25% of premium streaming subscribers opted for an ad-inclusive package in 2023. An impressive 60% of American adults showed a willingness to watch ads if it translated to lower subscription fees.

Furthermore, the recent introduction of ad tiers by giants like Netflix and Disney+ seems to have resonated well with users. A significant 85% of Netflix and Disney+ user base reportedly transitioned to the ad-supported plans soon after their introduction. Netflix, in its recent Upfront presentation, proudly highlighted that its ad tier had acquired nearly 5 million global users by May 2023. Recent data from Antenna corroborates this trend, revealing that between 17% to 20% of Netflix’s new subscribers in Q2 selected the ad-supported tier.

With premium platforms progressively inflating their subscription charges, the growth trajectory of FAST and ad-supported streaming seems poised to continue.

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