Netflix and Disney+ Likely Gained Ad-Supported Subscribers in 2021: Analyst

Streaming services like Netflix and Disney+ are seeing a shift in subscriber behavior as prices continue to rise. With costs climbing by 12% this year, many users are opting for lower-cost, ad-supported plans over the more expensive ad-free options.

According to Convergence Research Group, this trend has been consistent for the past four years, with subscribers gravitating towards the more affordable ad-backed subscriptions. While this may seem like a loss for those who prefer a commercial-free viewing experience, it actually benefits companies like Netflix and Disney by bringing in more revenue per user.

Morgan Stanley’s analysis reveals that ad-supported streaming subscriptions are on the rise, making up a significant portion of both Netflix and Disney+ subscribers. In fact, the firm estimates that ad tiers accounted for all net additional subscribers for both platforms this year, while the number of ad-free subscribers declined.

As streaming services continue to improve their monetization strategies, the shift towards ad-supported plans is expected to become even more prominent. While the revenue generated from ads has not met expectations in the past, the increasing demand for ad-supported streaming could level out the supply-demand equation in favor of these platforms.

Overall, the trend towards ad-supported streaming options is reshaping the industry and providing a more budget-friendly alternative for viewers. This shift not only impacts how we consume content but also highlights the evolving nature of the streaming landscape.