Will Apple TV+ add an ad-supported tier? It may have to considering the pressure that will be coming from other streaming services.
Ad-supported streaming tiers from Netflix, Disney and others have collectively surpassed 100 million users in the United States and could generate over $10 billion in revenue domestically by 2027, according to new research from the London-based firm Ampere Analysis..
Regarding the report, The Wrap notes that more than 1 million Netflix accounts and around 800,000 Disney+ subscribers in the U.S. are on ad-supported tiers, according to Ampere, representing nearly 2% of each service’s total subscriber base. The firm estimates that more than 90% of Hulu subscribers are on the ad-supported tier, representing around 45 million subscriptions.
Prior to the launch of Max, Discovery+ had somewhere in the region of 10 million ad-supported accounts, while HBO Max had around 2 million, Ampere said. It added that Peacock has more than 30 million ad-supported subscribers, the most of any new U.S. OTT service, while Paramount+ has more than 25 million ad-supported subscribers in the U.S.
Ampere believes that hybrid services are “an increasingly important element of streaming service monetization, and hybrid tiers often generate more revenue per subscription than their ad-free counterparts.” It also says that the tiers “represent a way for consumers to maintain a wider array of subscriptions while economic times remain tough.”
In February it was announced that Apple has hiredLauren Fry, a long-time ad sales executive, to “help build a video advertising business” for Apple TV+, reports The Information. This could mean, as the article hints, that Apple is considering an ad-supported tier for Apple TV+. In January Business Insider reported that is looking to hire an ad sales exec to focus on live sports and ad-supported TV+ plans.
With streaming services such as Netflix and Disney + launching ad-supported versions at lower cost, Apple may be considering the same. This year Apple TV+ saw its monthly price go from $4.99 to $5.99. Apple may be considering an even less expensive option with ads. Or perhaps the tech giant needs more income to pay for the billions it’s spending on original programming for the streaming service.