NOTE: This post includes Antenna data first reported by The Wall Street Journal on December 20, 2022.
Netflix’s announcement that it would launch an ad-supported option was a major validation that the “dual revenue stream model” which has always fueled Pay TV will persist in the streaming world. So there is understandable interest in early traction for the offering, which just launched November 3.
Antenna’s data suggests a modest start. Antenna finds that 9% of Netflix Sign-ups in the U.S. in November were to the “Basic with Ads” plan, making it the least popular of their plan options.
In addition to the Basic with Ads Subscribers who signed-up for Netflix, Antenna observed 0.1% of Netflix’s existing U.S. Subscribers switching to the Basic with Ads plan in November.
Similarly, HBO Max saw a mild pickup when it first launched its ad-supported option in June 2021. As Antenna previously reported, 15% of HBO’s U.S. Sign-ups were for HBO Max With Ads in its launch month.
In addition, Antenna found that 0.2% of existing U.S. HBO Max Subscribers switched to the ad-supported plan in its launch month, about double the Netflix switching rate.
The popularity of the HBO Max With Ads plan did increase over time, accounting for as many as nearly one in three Sign-ups over the course of its first year in the market. Currently, Antenna estimates that 21% of HBO Max Subscribers are to the ad-supported plan.
Consumers have demonstrated that, with the right pricing and packaging, they will opt-in to ad-supported video services. In fact, Services that launched from day one with an ad-supported tier (or, in Hulu’s case, launched ad-free, but introduced an ad-supported option many years ago) have much higher share of Subscribers selecting the ad-supported option.
More information on Antenna's methodology is available here.
Brendan Brady is a Content Strategy Associate at Antenna, a measurement and analytics company providing insight into purchase behavior and subscription metrics across the new media landscape.
