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With rising subscription fatigue and tighter household budgets, streaming giants like Netflix and Prime Video are rethinking their revenue strategies. The answer? Ads. Once champions of ad-free viewing, these platforms are now leaning into ad-supported models to stay profitable, attract budget-conscious viewers, and appeal to advertisers. But while this shift helps their bottom line, it’s changing the streaming experience - and testing how far viewer tolerance can stretch.
A recent 2024 study by Kantar clearly shows that platforms with ads are raking in revenue faster than their subscription-only counterparts. These ad-supported models are often cheaper for budget-conscious viewers and are a big draw for advertisers wanting to connect with active audiences. Plus, the steady income from ads helps these platforms maintain financial stability and find a better balance between making money and keeping subscribers happy.
Brian Wieser of Madison & Wall predicts that major premium streaming services will experience a meaningful increase in ad revenue. Disney+ anticipates 36% of its subscribers will use ad-supported plans by next year, while Hulu is projected to be at 65%; Max (28%); Netflix (15%); Paramount+ (58%); and Peacock (84%). Disney+, Hulu, Max, Netflix, Primary+ and Peacock’s market share considerably increased since 2022, with Disney+ holding 3%, Hulu (60%), Max (25%), Netflix (0%), Paramount+ at 50% and Peacock at 80%.
We now understand that ad-supported services can address the costly and oversaturated market issues. However, as we move forward, it’s crucial to consider customer spending habits and loyalty.
Let’s take Prime as an example. You may have noticed last year that Prime Video rolled out ads within its existing subscription plan and required users to pay an extra $2.99 per month to opt out, despite already paying for what was once an ad-free experience. For Prime, Q1 typically sees increased churn due to post-holiday cancellations; however, this financial decision posed a significant risk and led to a 3% loss of its subscriber base - a notable rise from the usual Q1 churn. Complaints about the number of ads shown nearly doubled, highlighting initial dissatisfaction with customers, who were unhappy about paying the same price for a now ad-supported service. This is always to be expected when going from non-ad Service to an ad Service.
Despite this, Prime Video’s Net Prompter Score (NPS) increased in the same quarter, and among their subscribers who used other streaming services, more ranked Prime as their #1 service than in their previous quarter, signalling customer loyalty despite the risky business move. This showcases that although Prime Video took an initial short-term hit, its content library and customer loyalty as an industry giant helped maintain its subscriber value long-term.
If smaller niche platforms looked to follow Prime Video’s example, it would be best to maintain a realistic view of customer needs. Prime’s success stems from its position as an industry leader, with exclusive content and built-in customer loyalty. A sudden shift to ads on a smaller platform, without careful consideration of budgeting, competitors and clear value-adds, could result in permanent churn rather than just a temporary dip.
So, do viewers like ads? The Prime case study shows that most don’t - especially when ads are added to a previously ad-free experience without a corresponding drop in price. Viewer complaints doubled, and churn rose. However, the increase in NPS and loyalty suggests that ads alone don’t break a service - but the perceived value of content and trust in the brand can mitigate the damage. In short, while most consumers don’t like ads, they may tolerate them if the platform provides exceptional value in return.
Sports streaming isn’t just about game time - it’s also primetime for targeted advertising.
Fans are engaged, emotionally invested, and often watching live, which means they’re far more likely to engage with ads. Streaming platforms can really take advantage of this by diving into niche sports. By zeroing in on specific teams, leagues, or even those under-the-radar sports that their super fans are into, they can create a more favourable and personalised viewing experience.
Just look at Manchester United—they’ve fully embraced digital streaming to keep their global fan base engaged. Services like FuboTV are all about catering to sports lovers. Plus, platforms that gather sports content from different apps make it way easier for fans to access and enjoy the content they love. This strategy really pulls in viewers and helps create a close-knit community, keeping fans coming back for more.
Netflix is jumping on board too, getting into live sports to bring on board new subscribers. Their recent deals with WWE and big events like Jake Paul going up against Mike Tyson gave their subscription numbers a nice boost. This is a huge change for Netflix, especially since they’ve started offering cheaper ad-supported plans after their prior stance against advertising. Bela Bajaria, their content chief, pointed out that wrestling is appealing because it has a committed and diverse fanbase, offering a steady stream of content year-round. Experts think this makes wrestling a solid bet for advertisers as well (Financial Times, 2025). Following this trend, Netflix might even bid for the U.S. broadcast rights to Formula 1 later this year (Reuters, 2025).
Disney+ is also making waves in the sports streaming scene with its recent partnership with ESPN, which aims to expand its sports offerings in Australia. This market was long dominated by Foxtel; however, DAZN’s has taken acquisition of Foxtel, indicating intensifying rivalry in the sports broadcasting industry. It seems like Disney+ has a plan to jump in and stir things up. Their focus on specific areas and tweaking their sports content to match local tastes shows they understand how vital it is to win over local fans. This approach highlights just how important it is to have localised sports content for connecting with audiences and building loyalty, which is something other streaming services should definitely pay attention to. OTT platforms can really up their game by customising their content to fit different regional flavours.
BeIN is a Qatar-based service that’s all about football, and it’s a huge hit in the Middle East and North Africa (MENA). They show big-name European leagues at prices that are pretty wallet-friendly, so fans can catch their favorite teams without breaking the bank. A lot of fans are pretty fed up with the broadcasting situation since it feels way too expensive and complicated to access what they actually want to watch. Just look at UK football fans - they often end up juggling multiple subscriptions like Sky Sports, BT Sport, and Amazon Prime Video, which can add up to over £100 a month. On top of that, they still have to shell out for an annual TV Licence fee to fund the BBC, just to watch live TV in the UK. As of April 2024, that fee is quite steep at £169.50 per year. It’s no wonder fans are feeling the financial pinch with the current broadcasting system.
Fans want the Premier League to consider new streaming options, like “PremFlix.” This would let fans watch all the matches they want in one place, and it could be cheaper than the current system. This direct approach not only reduces consumer costs but also offers new avenues for targeted advertising. By cutting out the middleman, you could theoretically keep more revenue from advertisers and create a direct relationship with fans.
Offering specialized subscriptions for specific teams or leagues can help reduce piracy by providing more affordable options. Many fans turn to illegal streaming due to high prices or limited access. The sports industry is reportedly losing approximately $28 million annually due to piracy (Global Data, 2024). By creating lower-priced, customised subscriptions, OTT platforms can expand their customer base and introduce ad-supported offerings for increased revenue. Fans willing to pay for specific content are more likely to engage with ads related to their favorite teams or local businesses. In fact, 64% of U.S. CTV viewers report paying attention to ads while watching live sports, presenting a valuable opportunity for targeted advertising (The Current, 2025).
FAST (Free Ad-Supported Television) channels has well and truly taken off, with platforms like Pluto TV, Tubi, and The Roku Channel leading the way. These services work a lot like traditional TV, offering scheduled shows and movies at no cost, thanks to ads. People are loving them for several reasons: you can access a ton of content without paying anything, there’s hardly any commitment compared to subscription services, and they’re creating cool niche content that caters to specific interests.
A 2025 Vizio report shows FAST channels outperform connected TV attention benchmarks by 20%-25% and outshines linear TV by 35%-40%. UserTesting (2024) found that users’ top streaming preferences include free access to premium channels (40%).
As major networks like NBC and CBS enter the FAST market (Next TV), its growth signals a shift in streaming. Niche FAST platforms thrive by targeting specific audiences - Tubi specialises in classic films, while Pluto TV offers genre-based channels. Their ad-supported model ensures sustainability without costly content licenses, making them attractive to budget-conscious viewers avoiding subscription fatigue.
Streaming platforms have mostly moved on from those old-school commercial breaks, but with the resurgence of ad-supported content, brands are getting creative with how they show ads. Instead of cutting into your show with random commercials, they’re using AI to serve up personalised ads based on what you actually like to watch.
In fact, according to a 2023 report by Twilio, more than 9 in 10 businesses (92%) are using AI-driven personalisation to drive growth in their business. So, if you’re into fitness stuff, you might see an ad for the latest running shoes instead of a generic car ad. Then there are shoppable video ads that allow viewers to buy featured products right from the ad using QR codes, or by easily sharing links between their TV and phone. This setup is pretty popular on platforms like YouTube, where if you’re logged into the same account on both devices, you can access product links instantly for a smoother shopping experience.
Customers are more likely to engage with personalised ads. A study from Innovid revealed that almost 30% of people are more inclined to buy from a brand if its ads feel personal to them. Plus, 31% say they’re more loyal to brands that cater their ads to what they like. That’s pretty impressive and shows how fresh and creative advertising can really grab attention and keep people interested. When brands customise the ad experience to match what individuals prefer, they connect better with their audience, leading to more engagement and loyalty.
Another effective approach is using interactive ads, which is a smart way to advertise because they let users pick how they want to engage. This kind of choice makes the experience more fun and adds some excitement to the interaction. This is especially useful on platforms that are usually meant for just watching. For instance, some apps are making it super easy to buy things right from their interface - like how Google TV lets you snag content without any fuss. But there are still some bumps in the road, like Apple taking a 30% cut on in-app purchases, which can make it tricky for businesses to actually turn a profit.
Ad-supported tiers are shaking things up in the streaming world, letting platforms make money while keeping viewers interested. More and more, we’re seeing hybrid models that mix subscriptions with ad-supported options, suggesting that a balanced approach is likely the way forward for digital entertainment.
Still, there are some challenges to think about. For one, there’s ad fatigue - are viewers going to keep putting up with more ads, or will they start looking for other options? Then there’s the question of whether these hybrid models can bring in steady revenue while keeping people happy. And what about future innovations? Will things like blockchain or micropayments really take off?
As the streaming scene keeps changing, platforms will need to tackle these issues to grow and keep their users around in the long run.
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