Sometimes, a headline can obscure an important fact about the industry’s trajectory, prompting the need for an alternate SVOD headline. Here are three recent examples that tell us one thing, but the details say something else.
“38% of Streamers Say They Would Cancel or Limit the Number of Streaming Subscriptions to Save Money”
Without any context, this headline doesn’t tell us much. The data is drawn from a OnePoll survey fielded on behalf of Plex in mid-May 2023. The question in the survey set the scene for the participants by reminding them about continued inflation, rising subscription costs, and change in terms like Netflix’s password-sharing curbs.
Some of the data points from the survey show a lot more color. For example:
- 30% are downloading or creating accounts for additional free streaming services
- 31% are downgrading paid streaming memberships to a less expensive tier with ads
- 29% are sharing login details for streaming apps with friends and family.
A more accurate headline from this data would be:
- Streamers facing rising costs cut back, downgrade, and flee to free
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“A Third of All SVOD Sign-ups Are Now For Partially Ad-Supported Tiers”
The headline is drawn from Antenna’s latest research, State of Subscriptions Report. The report shows that 32% of premium SVOD sign-ups in 2022 were to a tier of service that included ads. In 2019, only 18% of sign-ups were for an ad-supported tier. The data also shows that 25% of SVOD subscribers are enrolled in a tier that includes ads in 2023, a 3% increase from last year.
Far from showing the success of ad-supported SVOD, I think the Antenna data emphasizes the durability of demand for ad-free viewing. Even though all the top SVOD services now offer a cheaper ad-supported tier, 75% of subscribers have stuck with ad-free viewing, and 68% of new sign-ups also opt to skip the ads. A great case in point is Disney+. When the service introduced the ad tier, it didn’t give subscribers a cost break. It introduced the tier at the same price as the previously ad-free tier, $7.99 a month. It then asked anyone wishing to continue watching ad-free to pay $3 more monthly (a 40% increase!) Amazingly, 62% stuck with ad-free viewing.
A better alternate SVOD headline for the original piece would have been:
- More than two-thirds stick with ad-free SVOD rather than pay less and watch ads
“Netflix is Eliminating Its Cheap Ad-Free Plan”
Amid all the fuss around introducing password-sharing curbs, you might have missed the headline that Netflix plans to eliminate its lowest-cost ad-free tier. The $ 9.99-a-month plan provides 720p HD viewing, a single concurrent stream, and no ability to download videos. Those already subscribed to the Basic plan can keep it, at least for now, but new subscribers can no longer sign up for it.
As the Antenna data shows, most people want to watch ad-free. I suspect most would much prefer to watch at the lowest HD resolution on the Basic plan than watch with ads at the higher 1080p resolution and save $3. Once the Basic plan is eliminated, it will cost $8.50 per month more to watch without ads, the highest ad-free viewing penalty among top SVOD providers.
If you plan to sign up for Netflix or downgrade to save money and don’t want to watch ads, the Basic plan is still available in the US. But you should move fast before the opportunity is gone for good.
A better alternate SVOD headline for the piece reporting on the change would be:
- Netflix plans to boost ad-free viewing penalty by 280% to $8.50 a month.
