Streaming customers sign up to services with advertising to lower monthly costs

The number of Australians taking up this new option has doubled in the past twelve months.

Boy Swallows Universe S1. (L to R) Travis Fimmel as Lyle Orlik, Phoebe Tonkin as Frances Bell in Boy Swallows Universe S1. Cr. Courtesy of Netflix © 2023

Streaming customers in Australia are increasingly signing up to services that include advertisements in exchange for cheaper monthly plans, new data has found.

Research from data and insights firm Kantar, to be released this week, found the number of Australians with advertising video on demand services has more than doubled in the past 12 months, reaching 12.5 per cent in the March quarter, up from 5.6 per cent in the same quarter last year.

The significant increase in Australians with AVOD services is expected to grow further as more streaming companies embed ad-supported plans to help boost revenue.

The data is based on a longitudinal study of 10,000 Australian streaming consumers.

In Australia, streaming services including Netflix and Foxtel-owned BINGE have ad-tier offerings and more are expected to follow suit in the coming months.

Kantar consumer director Andrew Northedge said there is a clear willingness of consumers to sign up to AVOD services in return for cheaper monthly subscription costs.

“Who really wants to see ads even if they are semi-personalised? It’s a pretty simple sell that you get the service cheaper if you have ads,” Mr Northedge told The Australian.

“In Australia it’s at 12.5 per cent of all households (with AVOD services), in the US it’s about 50 per cent of all households, and a lot of other players there have ad tiers including HBO and Prime Video.”

Netflix offers its standard plans with ads for $6.99 per month; its next standard plan jumps to $16.99 to escape ads.

Phoebe Tonkin as Frances Bell in Netflix series Boy Swallows Universe. Picture: Netflix

BINGE offers customers basic plans with one screen from $10 per month including ads, increasing to $18 for two screens without ads.

News Corp (publisher of The Australian) has a 65 per cent stake in the Foxtel Group, which owns BINGE.

Paramount Plus has also rolled out advertising-supported subscription offers overseas and they will launch in Australia in June, with a basic plan at $6.99 per month without ads.

Paramount Plus executive vice-president and international general manager Marco Nobili said the introduction of ad tiers will provide a more competitive offering for consumers.

“The ‘Basic’ tier allows us to continue to lead on value by providing consumers an even more affordable entertainment choice for the entire family,” Mr Nobili said last month.

According to the Kantar research, Australian TV series Boy Swallows Universe on Netflix took out the number one spot for the most watched and most enjoyed title in the March quarter.