As costs and streaming services add up consumers are being forced to be more creative in how they budget their time and most importantly their money. This has prompted more than a few premium streaming services to jump into the world of AVOD (ad-supported Video on demand). One of the biggest names is streaming has been on that train from the start. Hulu. In its infancy, the service was available via computers, totally free with commercials.
As the set-top boxes became staples of the living room for early adopters to streaming Hulu launched a paid service that it differentiated at the time as “Hulu Plus”. Eventually, Hulu dropped the designation and began to market the way it does now with the paid ad-supported service and later a more expensive version without advertising. This year saw Netflix and Disney+ get into the ad-supported world while Comcast launched a version Peacock for free with ads along with more deluxe paid tiers.
Some analysts believe that this pattern will continue to play out in the future as companies both look for new customers and attempt to double dip by getting revenue from subscribers and advertising.
Parks Associats projections say that the number of U.S. households using at least one ad-supported streaming service will grow at a compound annual rate of 6.7% between the end of 2021 and 2027, to reach 52 million,
The ad-free options though are far more popular. Parks expects there will be 338 million SVOD subscribers at the end of 2021 to 450 million by 2027. That’s a 33% increase over a six-year period, or a 5.5% CAGR.