- New data shows AppleTV+ has more than tripled its share of streaming subscribers.
- But it could be at a disadvantage as it looks to take on Hulu, Peacock, and others for video ads.
- More established streamers have had the most success growing their ad tiers.
Apple TV+ is rapidly growing its subscription numbers, but the tech giant’s streamer may be at a disadvantage as it looks to grow its video advertising business, new data shows.
The findings come as Apple TV+ is rumored to be planning to join the other major streamers in chasing video advertising.
Apple hired ad exec Lauren Fry earlier this year to build out the business, The Information reported, stoking speculation about its ad plans.
Apple TV+ has more than tripled its share of ad-free subscribers in the past two years, jumping ahead of Paramount+, Disney’s Hulu, and Warner Bros. Discovery’s Max in share, according to new data disclosed June 28 by subscription measurement company Antenna.
Apple TV+ has 11% of share of ad-free streaming in May, up from 3% in 2021, putting it in third place after Netflix (32%) and Disney+ (13%).
But Apple TV+ has yet to move into ad-supported streaming, where competitors are seeing their biggest subscriber growth — not to mention new revenue opportunities.
And the streamers that have had an ad-supported tier for a while may have a first-mover advantage, the Antenna data suggests.
Streamers that have been in the market longer — like Hulu, which has had ads since 2008, and Peacock, which launched in 2020 with an ads tier — have the biggest portion of subscribers opting for ad tiers (57% and 74%, respectively).
Netflix and Disney+, meanwhile, whose ad tiers are the newest — having launched late last year — have only 2% and 5% of their subscribers opting for ads, respectively.
Other findings from Antenna show there’s a big opportunity for streamers to grow their business via ad tiers: When they have had the option of an ad-supported tier for a given service, 58% of Americans chose that tier some or all of the time.
The portion of people who mix and match ad-supported and ad-free plans is small but growing fast. And the portion who sign up for ad tiers is more or less consistent across household income, age, gender, and ethnicity (though people who use services with a high prestige factor, such as AppleTV+, could have a lower tolerance for ads, according to Antenna). This may surprise many in the advertising community who worried that high-income households would opt out of ads.
“It’s a positive for the ad industry,” Antenna cofounder and CEO Jonathan Carson said. “The assumption was that advertising would be something that was only in the lives of lower-income consumers.”
Other factors that could impact consumers’ preference for ad tiers could be how many ads a given service runs per hour and how well they integrate the ads in the viewing experience, Antenna noted.
Read the full article here