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As the global video streaming market continues to grow and become increasingly crowded, streaming businesses are looking for ways to maintain their growth and competitive edge with ad-tiers increasingly a priority for service providers shows research from NPAW.

The online video analytics and business intelligence provider’s 2023 State of Streaming Advertising and Analytics survey took the opinion of 250 business owners from North America, LATAM, Europe, ME and APAC in November 2022. All respondents were director-level and higher working in companies involved in online video streaming, such as public and commercial broadcasters, telcos, sports and eSports companies, media companies, movie studios, production houses, content owners and providers, and OTT streaming services.

The top line finding was that ad-based video streaming models are on the rise because of their potential to increase platform revenues and reduce subscription prices, a win-win for streaming services and consumers in a time of economic uncertainty and market saturation.

As many as 76% of subscription-based video on-demand (SVOD) companies plan to introduce ads by 2025. Indeed, implementing a hybrid model – an ad-supported tier plus a premium, subscription-based one) – was the preferred path for 59% of them — a move all these respondents agree is aimed at lowering the price of subscriptions.

Adoption of third-party video analytics was well underway, especially in the telecom industry. About half of streaming companies (47%) are already using a third-party video analytics tool to track platform performance and user behaviour, while 39% plan to do so. The adoption of these tools is higher in the telecom industry (54%) than in Media & Entertainment (40%), suggesting telcos started pursuing a data-driven approach earlier on.

While almost two-fifths (39%) of ad-based services don’t fully trust their ad server data, yet only a quarter used third-party ad analytics. Ad server data is a first step towards understanding ad performance, but it only paints a partial picture said NPAW. All ad-based services plan to implement a third-party advertising analytics tool in 2023 and despite the still fairly low adoption levels of third-party ad analytics tools, all ad-based streaming companies currently not using one are planning to do so this year. 34% say they will implement one within months, while 44% plan to deploy one by the end of 2023.

“It’s encouraging to see that more and more companies are taking a data-driven approach to running their video business, especially as the industry’s shift to ads brings a unique set of measurement challenges,” said NPAW chief marketing officer Till Sudworth. “To truly make the most of their advertising-based streaming business, video providers will need an advanced, third-party ad analytics tool — one that can help them track ad performance from an end-user perspective and correlate that information with insights about user behaviour and content preferences.”