Legacy Streamers' Ad Options Slowly Gain Share - How Will Smaller Players Fare?

• by Wayne Friedman , Staff Writer, 5 hours ago

A softer streaming market makes one wonder about how the survival of small to mid-size streamers in future years. 

We know major premium streaming players have had their ups and downs of late -- and are always under the glare of high-profile business news articles.

In the coming year these companies -- including Netflix, Amazon, Disney+, Paramount+ and Peacock, as well as Tubi TV and Pluto -- will see anywhere from 7% to 12% per-year ad-revenue growth through 2025, according to MoffettNathanson Research.

One question arising from those results is what will become of smaller/mid-size video streaming platforms.

MoffettNathanson says the growth rate in the “other” column -- a rest-of-the-best collective -- is expected to continue at 21% growth rate for the next several years. 

We believe this will consist of those existing mid-size platforms such as Discovery+, AMC+, Starz, CuriosityStream, Amazon Freevee, BritBox, Crackle, Redbox, ViX and many others. (And is YouTube in this group? We don't know).

We ask this because we are considering these in light of what are still mostly money-losing operations for most of the big legacy media-owned platforms.

Do mid-sized and smaller streamers need to have a different financial proposition? 

This may come with examining a seemingly standard descriptor for existing premium ad-supported platforms, that is incorporating a “limited-advertising” modifier for those ad-supported options. 

This means generally only four to six minutes of commercials per hour, far lower than the 10-12 minutes of commercials on the better, mostly broadcast linear TV network. 

Even worse, many cable TV networks still have up to 17 minutes of non-program content -- which can include paid advertising commercials, on-air promos, and public-service announcements.

Now, imagine that those hard-pressed mid-size streamers look to inch up their ad revenue -- where they might allow more advertising time -- for example, six to eight minutes an hour.&nbsp

This could be in addition to raising subscription prices on those ad-options. 

Consider current ad-supported subscription prices: Warner Bros. Discovery's Max is at a top-drawer $9.99 a month, while Hulu is $7.99; Netflix, $6.99 and the Disney Bundle (Hulu, Disney+ and ESPN+) is  at $12.99. Amazon Prime (which includes Prime Video) is at $14.99 -- with ads. Add another $2.99 if you want no ads on Prime Video.

Can modestly sized, somewhat under-the-radar streamers find a way forward? In addition to possible bundling of smaller services, think about under-the-radar price/advertising expansion.