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Ampere: Ad-supported streaming tiers gaining popularity

More streamers are opting for the commercial-lite tiers of premium streaming services, which could generate $10 billion in revenue by 2027.

More streamers are opting for the commercial-lite tiers of premium streaming services, which could generate $10 billion in revenue by 2027.

A new report from marketing firm Ampere Analysis suggests the popularity of ad-supported streaming tiers and free, ad-supported channels are growing in popularity in the United States.

The report offers a first look at the approximate number of customers who are opting for the ad-supported tiers of major streaming services like Netflix, Hulu and Max, based on Ampere’s own estimates.

According to the company, Netflix currently has around 1 million subscribers who are opting for the ad-lite version of its streaming service, which costs $8 a month and includes short commercial interruptions during content.

Over at Warner Bros Discovery, the flagship Max service has around 2 million customers paying $10 a month for the ad-lite tier, compared to 10 million customers who are watching ads on the company’s lifestyle and knowledge streamer Discovery Plus.

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Ampere also estimates that around 90 percent of customers who are subscribed to the video-on demand version of Hulu are watching with ads. That plan costs $8 a month, compared to a commercial-free tier of service that is priced between $15 and $20 per month.

In its two-page press report, Ampere didn’t explain the methods it used to generate estimated data on the number of customers who are subscribed to ad-supported tiers across streaming services in the United States. And some of Ampere’s data appears to conflict with reporting from companies that operate those services.

For instance, Ampere estimates that Comcast’s streaming service Peacock has more than 30 million subscribers to its ad-supported service in the United States. That figure is higher than the 24 million paid subscribers that Comcast reported during its financial earnings report last week. (Comcast’s figure reflects the number of subscriber as of June 30, which coincides with the end of its second financial quarter; Ampere did not offer a timeline for its data.)

A spokesperson for Ampere said the firm classifies paying subscribers to a streaming service differently from how companies report the same data.

“Classically, our understanding is that Comcast reporting has included only those subs on an independent paying subscription under their paid definition, and not subscribers gaining access through their cable TV service,” the spokesperson affirmed in an email message to The Desk. “We estimate the incremental sub base through this mechanism on top of the reporting paying base. Obviously there are now changes occurring which mean that many subs via this latter mechanism will likely be migrated into the ‘paid’ category, as they will be paying a small extra fee on top of their cable bill to keep access to Peacock.”

The spokesperson said Ampere will “reevaluating the metrics in line with the Q3 results, and alongside the next wave of our market tracker, when we expect the full impact of the transition to be clearer.”

Ampere estimates that the U.S. ad-supported streaming market will generate as much as $10 billion in annual revenue by 2027, and was one of the chief reasons why Netflix recently decided to remove a commercial-free tier called “Basic” for new subscribers. The Basic tier cost $10 a month, while the ad-supported plan is $2 cheaper.

“The tiers also represent a way for consumers to maintain a wider array of subscriptions while economic times remain tough,” Ampere concludes in its report.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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