With Netflix and Disney Plus just months away from launching ad-supported versions of their respective streaming services, Kagan, the media-enquiry arm of S&P Global Market Intelligence, says that lower prices and more than ads may simply encourage current ad-free customers to switch to the more than economical tiers.
Kagan surveyed nigh 2,519 streaming service subscribers and institute that 60% to lxx% of customers of Hulu, Peacock Premium, Discovery Plus and Paramount Plus already subscribed to the ad-costless tier. Merely about 43% of HBO Max customers subscribe to the advert-supported tier, but that may exist considering it is only a few months erstwhile. HBO Max launched its ad-supported tier in June 2021.
According to Kagan, while about one-third of those advert-supported customers lived in households with less than $50,000 in annual income, 25% to 40% lived in homes where annual incomes were $100,000 or more.
“Given the popularity of ad-supported plans, operators such every bit Disney and Netflix that are launching ad-supported plans may not meet a mass influx of new subscribers and could instead see a sizable number of existing subs switch to ad-supported offerings,” Kagan senior research analyst Seth Shafer wrote in the report.
Disney Plus is expected to launch its advertizement-supported version on December eight, and Netflix has said it plans to practice the aforementioned earlier the end of the year. Netflix had its first ever quarterly streaming subscriber loss in Q1 (200,000 customers) and in Q2 lost about one 1000000 streaming customers. The conventionalities is that as the number of streaming services grows, consumers are gravitating toward advert-supported tiers to go on tier monthly costs down. Simply in the Kagan report, Shafer wrote that it may only come downward to each service being different.
“A case could be made that Netflix and Disney Plus are simply ‘different’ when it comes to advertizement viewing preferences — Netflix, due to the fact that it has been an ad-free oasis for its entire being and Disney Plus, due to some parents seeking to continue children from being exposed to ads on the service,” Shafer wrote. “While those factors could slightly reduce levels of ad-supported subscribers for Netflix and Disney Plus relative to other services, survey data suggests that a sizable number of new and existing subs for both Netflix and Disney+ will opt for ad-supported tiers.”
Kagan found that a large pct of ad-supported users at other streaming services are also subscribers to Netflix and Disney Plus. According to the company, 82% of Hulu, 84% of HBO Max, 79% of Discovery Plus, 78% of Paramount Plus and 66% of Peacock Premium advertizement-supported subscribers also subscribe to Netflix. Between 42% and 64% of customers of those ad-supported services also subscribe to Disney Plus, co-ordinate to Kagan.
The researcher added there was lilliputian “crossover beliefs” between ad-supported and ad-costless tiers, pregnant that when given the pick, advert-supported customers tend to stick with that tier with other services.
“Using Hulu and HBO Max as examples due to their larger respondent base sizes across multiple services, ad-supported viewers at those ii services tended to select ad-supported tiers when they used other services,” Shafer wrote. “Advert-complimentary viewers were as well generally more likely to select ad-costless tiers at other services but the tendency was less apparent when compared to ad-supported users opting for other ad-supported offerings.” ■