Netflix‘s ad-free subscribers could sure use a commercial break once in a while. If for nothing else but to leave the screen for a lap around the house.
A new study by streaming-ratings company Digital i found that Netflix’s ad-free subscribers watch 40 percent more Netflix per day than the streamer’s ad-supported subscribers. That comes out to be 34 minutes more Netflix every day — or exactly 68 thirty-second commercials.
By our math, that doesn’t mean ad-free Netflix users are getting their money’s worth, technically. Though they are consuming a lot more Netflix than their ad-supported counterparts, they are paying a lot a lot more: Netflix’s sans-commercial plans cost more than 2-3 times what its “Standard with Ads” does. It is probably no coincidence though that the more you pay, the more you stream.
Why do we always seem to begin these stories with Netflix stats? Because it is still the overwhelming majority of what you’re streaming.
In the first half of 2024, Netflix got two-thirds of all the viewing time in the U.S. among the major global streamers, a group that also includes Amazon Prime Video, Disney+, and Max. Netflix’s dominance has waned a bit — down 6 percent from the final six months of 2023 — though the quartet’s daily viewing minutes grew 7 percent, from 121 minutes to 129 minutes.
Yes, Americans are streaming these four services (again, mostly Netflix) for more than 2 hours per day.
Don’t clutch your Japanese Akoya pearls, Premium Netflix users: Those on Netflix’s priciest plan — the 4K/Ultra HD hoighty-toighty one — watched an average of nearly 2 and a half hours of Netflix per day.
I can talk that noise — I pay $22.99 + tax for Netflix. Not so much because I’m hoighty-toighty, but because the downloading and simultaneous streaming on multiple devices is what keeps my kids, 4 and 7, from a full-on coup.
You don’t want to separate any of the youngs from their streaming — even the older youngs. While 54 percent of streaming households in the U.S. include a 16-to-34-year-old, the demo accounts for 60 percent of viewing time, Digital i found.
See Netflix’s daily viewing stats, by plan, as broken down in the below bar graph. Perhaps I could keep up with laundry simply by downgrading from purple to green, and I could apply that $16 savings to several-months’-worth of detergent.
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We promised this story wouldn’t completely be a love letter to Netflix. A competitor (at least one) is doing this whole ads thing much better.
In January, Amazon Prime Video introduced its ad-supported tier in a way that was unique even when compared to the same ad-free pivot at the other the big SVOD (subscription video on-demand) services. Instead of offering a slightly cheaper plan in return for some ad consumption, Prime Video inserted ads into every member’s viewing experience. The alternative was to opt out — instead of opting in to ads — for an extra $2.99/month. The principle of status quo resulted in 70 percent of Prime Video members sticking with the ad-supported tier, a plan that Digital i says already has twice as many subscribers as Netflix’s similar option.
Only 20 percent of Netflix’s many, many users have migrated to the ad-supported tier thus far. About one-third of Max and Disney+ members have adopted ads in favor of monthly savings. There are pros and cons to both approaches, but everyone seems to agree the higher ARPU (average revenue per user) comes from ad-supported.
SOURCE: IndieWire
