76% of SVOD services to introduce ads in the next two years

Wednesday, March 29th, 2023 
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NPAW Survey: 76% of SVoD Services To Introduce Ads in the Next Two Years

BARCELONA — As the global video streaming market continues to grow and become increasingly crowded, streaming businesses are looking for ways to maintain their growth and competitive edge. According to a new global B2B industry survey by NPAW, the leading provider of video analytics and business intelligence for the online video industry, 76% of subscription-based video on-demand (SVoD) companies plan to introduce ads by 2025. Implementing a hybrid model (an ad-supported tier plus a premium, subscription-based one) is the preferred path for 59% of them — a move all these respondents agree is aimed at lowering the price of subscriptions.

2023 State of Streaming Advertising & Analytics graphic

NPAW’s 2023 State of Streaming Advertising and Analytics survey interviewed 250 online video business owners from around the globe about their business models, advertising, and measurement practices and challenges.

The survey reveals how ad-based video streaming models are on the rise because of their potential to increase platform revenues and reduce subscription prices, a win-win for streaming services and consumers in a time of economic uncertainty and market saturation. It also shows that the adoption of third-party video and advertising analytics in the industry is still fairly low, yet quickly increasing as providers recognize the strategic advantage of comprehensive, real-time data.

In a nutshell, NPAW’s survey reveals how:

  • 76% of SVoD companies will be introducing ads in the next two years. For those SVoD services that do not currently include ads in their monetization strategy, advertising revenues are firmly on the roadmap. 76% plan to change their business model to include ads by 2025, becoming either a purely ad-based business or a hybrid one.
  • Adoption of third-party video analytics is well underway, especially in the telecom industry. About half of streaming companies (47%) are already using a third-party video analytics tool to track platform performance and user behavior, while 39% plan to do so. The adoption of these tools is higher in the Telecom industry (54%) than in Media & Entertainment (40%), suggesting telcos started pursuing a data-driven approach earlier on.
  • 39% of ad-based services don’t fully trust their ad server data, yet only 25% use third-party ad analytics. Ad server data is a first step towards understanding ad performance, but it only paints a partial picture. In fact, 39% of ad-based services don’t fully trust their ad server data. However, only 25% are using a third-party advertising analytics tool in addition to or instead of their ad server.
  • 100% of ad-based services plan to implement a third-party advertising analytics tool this year. Despite the still fairly low adoption levels of third-party ad analytics tools, all ad-based streaming companies currently not using one are planning to do so this year. 34% say they will implement one within months, while 44% will deploy one by the end of 2023.

“It’s encouraging to see that more and more companies are taking a data-driven approach to running their video business, especially as the industry’s shift to ads brings a unique set of measurement challenges,” said Till Sudworth, Chief Marketing Officer of NPAW. “To truly make the most of their advertising-based streaming business, video providers will need an advanced, third-party ad analytics tool — one that can help them track ad performance from an end-user perspective and correlate that information with insights about user behavior and content preferences.”

Links: NPAW