One-third (31%) of new paid subscribers to TV streaming services opted for ad-supported tiers in Q4, up from just one in 10 a year ago.
The latest Entertainment on Demand report from Kantar also found that more than two-thirds (69%) of new subscribers to Netflix chose the ad tier.
In its Q4 earnings, Netflix revealed the ad tier represented over 55% of sign-ups across the countries in which it was available, meaning the UK significantly over-indexed in the ratio of new ad tier sign-ups. Overall, Netflix held an 11.5% market share of new subscribers last quarter.
However, the biggest winner in Q4 was Amazon Prime Video, which earned the highest share of new paying subscribers in the quarter.
Although Prime Video consistently experiences a seasonal bump in membership driven by the Black Friday and Christmas period, this year it reached a peak market share of 21.1% (up from 15.4% in Q4 2023).
Usage was highest amongst 35- to 44-year-olds. Meanwhile, just 4.2% of those surveyed by Kantar said they planned to cancel Prime Video in Q1 — a reduction from a year earlier.
Apple TV+, meanwhile, has grown in consideration among British audiences, with 18% of subscribers now citing it as their most important VOD service, up three percentage points from last year.
Live programming drives growth at Netflix as attention shifts to adtech
Focus on quality
In total, 19.6m UK households had at least one paid streaming service in Q4.
“British viewing behaviour is showing noticeable shifts, with increased retention rates suggesting that the pressures of the cost-of-living crisis are starting to ease and brand loyalty is returning,” commented Kantar global insight director Dominic Sunnebo.
“At the same time, the greater allocation of household budgets towards entertainment could also indicate that streaming services are successfully improving their services, finding the right balance between quality content, diverse programming and pricing”, he continued.
Quality content was on display across streaming services during the quarter: Netflix’s Black Doves was the most streamed title among UK audiences in Q4 and drove 4% of new subscriber acquisition for the streaming giant, according to Kantar.
Meanwhile, The Day of the Jackal was a big win for Sky, driving 17% of new subscriber acquisition during the quarter.
Netflix leadership has also pointed to a successful focus on live programming as a key reason for an increase in global subscriptions during Q4.
“While overall subscriber growth across most VOD platforms in the fourth quarter was relatively flat, Netflix continues to set the bar and is rapidly transforming into a powerhouse in the ad space,” added Sunnebo.
“With a consistent subscriber share and an increasingly attractive ad tier option, Netflix has become the platform of choice for marketers who can complement cinematic film and TV with like-minded branded content.”
