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Rise of Free Ad-Supported Streaming: Amazon’s Freevee Leads Growth, Netflix Sees Decline

Rise of Free Ad-Supported Streaming: Amazon’s Freevee Leads Growth, Netflix Sees Decline

In an era where cost-conscious consumers are seeking to trim expenses, free streaming services such as Freevee, Pluto TV, Tubi, the Roku Channel, and Crackle are experiencing remarkable growth. Samba TV’s recent State of Viewership report reveals that 1 in 3 U.S. users are now subscribers of free ad-supported TV streaming (FAST) services.

Notably, Amazon’s Freevee has emerged as the frontrunner in this landscape, boasting the highest viewership growth in the first half of 2023 compared to its competitors, with an impressive 11% year-over-year increase. Amazon has strategically intensified its focus on the FAST market by introducing hundreds of Amazon Original titles from Prime Video to Freevee, along with the inclusion of 23 new ad-supported TV channels from industry giants Warner Bros. Discovery and MGM.

Pluto and Tubi have reported 7% and 6% viewership growth, respectively, while the Roku Channel and Crackle follow closely with a 5% increase each. Tubi, owned by Fox, recently highlighted a significant 79% growth in total consumption during its earnings call, underscoring the escalating demand for FAST services among viewers.

In contrast, subscription video-on-demand (SVOD) streamers witnessed declines in viewership for some major platforms. Netflix experienced a marginal 1% year-over-year drop, and Peacock faced a 2% decrease in viewership. This decline in Peacock’s viewership could be attributed to the removal of its free tier. Even Amazon’s Prime Video, Freevee’s sister streaming service, exhibited a modest 3% rise in viewership year over year.

The preference for more budget-friendly ad-supported streaming options over SVOD services is evident. Samba TV’s report indicates that 1 in 4 premium streaming subscribers has opted for an ad-supported subscription in 2023. Furthermore, 60% of U.S. adults expressed their willingness to consider subscribing to a “discounted” streaming service if it meant they could access content with ads.

These findings are particularly significant considering the recent introduction of ad tiers by streaming giants Netflix and Disney+. A remarkable 85% of participants who are subscribers of these platforms’ ad-supported plans signed up for them soon after launch.

Netflix’s ad-supported tier has shown remarkable success, garnering nearly five million global monthly active users as of May 2023, as highlighted during the company’s Upfront presentation. Additionally, recent data from Antenna indicates that 17% to 20% of new Netflix signups in the second quarter of this year were for the ad tier.

Reports have also emerged suggesting that Prime Video may be exploring the possibility of introducing an ad-supported tier. The Wall Street Journal revealed in June that Amazon has been considering an option where existing subscribers could receive ads automatically, with the option to pay more for ad-free content.

As Samba TV notes, “Streaming first hit audiences as an ad-free, content-when-you-want-it replacement to cable.” However, as streaming options diversify, audiences are now willing to embrace ads if it translates to lower monthly costs.

Should premium streaming services continue to raise subscription prices, the ongoing ascent of the FAST and ad-supported streaming trend is likely to remain an enduring phenomenon.

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