Demand expected for ad-supported streaming subscriptions in Sweden

Mediavision: Great interest in ad-supported streaming subscriptions

In many countries, it has become increasingly common to offer cheaper online video subscriptions that also include advertisements. In Sweden, there has only been a few such launches so far, where both advertising and consumer payments finance the service. However, there are many reasons to believe that this type of subscription will become more popular, as it enables lower consumer prices. For the industry, this could be a way towards further growth, if the low-priced plans lead to households acquiring more subscriptions. Mediavision can conclude that there is a significant interest among consumers in Sweden.

Cheaper streaming options, where households pay less because the subscription includes advertising, have launched on many markets. For example, in the US, Netflix has reported that the company’s ad-supported tier now has 23 million active users per month. This is still a relatively new phenomenon in Sweden. Currently, over 200,000 households, or about 7 percent of streaming households, have opted for a cheaper ad-supported alternative. This can be compared to 3 million households that have a fully paid streaming service without ads. In the autumn 2023, ad-supported options were launched by Disney+ and TV4 Play. Discovery+ also offers such subscription.

Mediavision has asked consumers about their interest in these subscriptions. If the five largest streaming services in Sweden were to launch cheaper subscriptions with ads, they could add up to 1.8 million new subscriptions. This would mean significant growth, but also that the companies’ revenues would include advertising as well.

Most signs point to an increased offering of ad-supported streaming services. Skyshowtime has communicated that an ad-supported subscription will be launched in April, in Sweden and other markets. Warner Bros. Discovery has also announced that the new streaming service Max will have such an option when it launches in Sweden this spring. Additionally, both Amazon and Netflix offer cheaper ad-supported options on several markets, but nothing has yet been communicated about a potential launch in the Nordics.

“As the pure pay-streaming market matures, new initiatives for growth are needed,” comments Fredrik Liljeqvist, senior analyst at Mediavision. “Advertising enables less expensive services for consumers but also new revenue streams for streaming services. This means households may consider acquiring more subscriptions, while advertisers in Sweden can reach many viewers with ads.”