Ad tier growth slows as total SVOD market stagnates
Ad tiers on subscription VOD (SVOD) services in the UK continued to grow in the final three months of the year, according to Barb’s latest Establishment Survey.
Amazon Prime Video remained the UK leader in ad tier subscriptions, likely due to the company’s strategy of moving all users to this tier by default when it introduced it a year ago.
Barb estimated 11.6m homes had access to Amazon’s ad tier in Q4, accounting for 39.4% of homes, up marginally from 11.5m in Q3. However, total Prime Video subscribers declined slightly from 13.4m to 13.3m (equivalent to 45.5% of UK homes).
“Set against a modest decline in overall Amazon Prime Video access, this would suggest newcomers to the service are taking the ad tier,” commented Barb head of insight Doug Whelpdale.
Netflix and Disney+ were far behind Amazon in ad tier subscribers, but showed stronger growth — although the rate of growth itself has slowed for both services compared with the previous quarter.
Barb estimated that 4.7m households subscribed to Netflix’s ad tier, up 24% from 3.8m in the previous quarter and now accounting for 16% of homes.
The ad tier of Disney+, meanwhile, reached 1.5m and 5.2% of homes, up 26% from 1.2m in Q3.
Wider market
Taking into account the entire SVOD market (including both ad-free and ad tiers), 20m UK homes had access to an SVOD service in Q4, down marginally from 20.1m in the previous quarter.
Netflix remained the dominant player.
A total of 17.1m UK homes had a subscription to Netflix in the final three months of 2024, holding a 58.2% share of homes, although this was also down from 17.3m total homes in Q3.
No other SVOD service aside from Prime Video and Netflix breached the 10m mark. Disney+ was the next biggest at 7.6m homes (26% of all homes), followed by Discovery+ with 3.1m (10.7% of all homes).
“The Netflix ad tier is now in almost 1m more homes than in Q3, while the Disney+ ad tier is now in 26% more homes than the last quarter,” Whelpdale described. “The majority of homes on these two services are still using the service without ads, so there is plenty of room for their ad tiers to grow.”
Indeed, according to Kantar’s quarterly Entertainment on Demand report, released last week, one-third of new paid subscribers to TV streaming services opted for ad-supported tiers in Q4, up from one in 10 a year ago.
Meanwhile, the study found that more than two-thirds of new subscribers to Netflix chose the ad tier.
Barb’s Establishment Survey looks at streaming service with a household penetration of more than 5%.
A third of streaming subscribers chose ad-supported tiers in Q4