|
How the Streaming Wars Will Shape 2024
Source: Various
Summary: The major streaming TV players went big on ads in 2023, and some say the next phase of the streaming wars will play out based on success or failure in advertising. Amazon Prime Video's ads tier is coming to the US on January 29 before rolling out to other markets, leaving Apple TV-plus as the only major streaming service without any ads. With the exception of Netflix, many major streaming services are still hemorrhaging money as they try to pivot towards profitability. As a result, 2024 will likely be marked by consolidation and higher ad-free subscription prices as streamers push users to higher-margin, ad-free options. More ad inventory and larger audiences are great for advertisers!
Advertiser pain points: But buyers need better targeting that goes beyond demo-based options, including execution against all of the new retail media data that’s being made available in the digital ecosystem. They also want better measurement to see where ads are running and viewed, and better frequency management, a long-standing obstacle. Brand budgets are also unpredictable in 2024, agencies say.
Here's a snapshot of the players, and our grades for each streamer's ad business:
The players:
After hitting a rough patch in 2022, Netflix responded with ads and a password crackdown. With 247M subscribers by Q3 2023, including 15M in its ad-supported tier, Netflix has something that most other streaming services don't: profitability. Netflix may have the most advertising potential of all the streamers, but also has the furthest to go in terms of strategy and execution. Grade: B.
Amazon will enroll Amazon Prime subscribers to Prime Video's ad-supported tier (or require them to pay $2.99 a month for no ads). This could generate an extra $5B in revenue for Amazon and drive its ad-supported audience up to around 115M subscribers, in the same top tier as Hulu, according to Digiday. Amazon is primed to explode. Grade: A.
Disney+ now has 150.2M subscribers, with half of new subscribers choosing its ad-supported tier. Disney’s streaming losses topped $1.6B in the first three quarters of 2023, but it predicts profitability by late 2024. Disney has been leading the pack in building a cutting-edge ad stack. They are positioned well. Didn’t love the outlay for Hulu, though. Grade: B+.
Disney will consolidate Hulu with Disney+ after buying Comcast's remaining stake this year. Hulu, as a brand, will struggle to grow. Grade: C+.
  
Warner Bros. Discovery merged HBO Max and Discovery+ to create Max (95.1M subscribers) in 2023. Now rumors suggest WBD could merge with Paramount (Paramount+ With Showtime has 63M subscribers). Peacock doubled subscribers in 2023 to 30M. These players are all just getting started. Lots of work to be done, but each is showing promise. Grade: INC.
|
