Streaming in the FAST Lane
Streaming in the FAST Lane: How AVODs Are Giving TV Back to the Advertisers
Disney+’s and Netflix’s ad-supported tiers are opening up new inventory and audiences to marketers in 2023
When it comes to the changing TV landscape, marketers are crying ad tiers of joy.
The days of streamers shunning marketers and gatekeeping massive subscriber audiences are over. Instead, SVOD subscriptions are declining, according to a Q3 analysis by Kantar, and growth is coming from platforms that have a combination of both SVOD and AVOD/FAST (free ad-supported TV), opening up inventory to advertisers.
And with streaming giants Disney+ and longtime advertising holdout Netflix both finally getting into the lower-priced, ad-supported game within the past couple months, that growth will likely continue into 2023, especially with price-pinched consumers looking for cost relief. Netflix co-CEO Ted Sarandos has even said the platform might offer multiple ad-supported tiers in the future.
“Consumers are hitting fatigue with all of these subscriptions,” said Marcy Greenberger, evp, integrated investment, UM. “It’s almost becoming as expensive as a cable subscription to subscribe to so many different services, so to have some either that are completely free with ads or that have a lower price tier but with ads is a good compromise and might enable consumers to have access to more of these platforms.”
Besides giving cost-conscious consumers lower-priced, ad-supported options in an increasingly uncertain economy, AVODs also allow marketers to access new, engaged audiences.
“From the standpoint of advertisers, it’s no secret that major brands have been clamoring for Netflix’s addressable audience. And now with Disney+’s ad tier launching, this gives brands greater potential reach within the overall CTV marketplace,” said Mike Proulx, vp, research director at Forrester.
Disney+ reaches more than 164 million subscribers, and Disney ad sales chief Rita Ferro told Adweek that marketers have been asking for an advertising tier, which rolled out in December, ever since the platform debuted in 2019. Meanwhile, Netflix, which tops 223 million subscribers, was nearly sold out of inventory when its ad tier debuted last November, despite launching long after the upfront at a time when some advertisers were pulling back on budgets due to economic factors.
