Deloitte is predicting that by mid-2023, all major video subscription services in Europe will have launched an ad-funded tier alongside ad-free offerings.
In its annual predictions, Deloitte’s TMT predicts that before the end of 2024, half of these providers will also have launched a free ad-supported streaming TV (FAST) service. An additional two-thirds of consumers will use at least one advertising video on demand service monthly, a 5% increase on 2022.
By 2030, most online video service subscriptions will be partially or wholly ad-funded. Meanwhile, ad funded tiers from subscription video on demand (SVOD) platforms will join existing ad-funded streaming services from broadcasters.
Paul Lee, global head of technology, media and telecommunications research at Deloitte, said: “Advertising video on demand is growing in popularity as video streaming platforms adjust their offerings to attract and retain viewers on household budgets that have been diminished by inflation. We know that consumers are often willing to trade ads for discounted or free content, and AVOD offers a way to keep watching, while also saving. In the UK, consumers average 2.46 subscriptions, meaning that ad-funded tiers may become even more attractive for those aiming to cut costs.”
In Germany, Deloitte reports a strong appetite, across all ages, 50 per cent of respondents to a Deloitte survey would use advertising-supported video-on-demand. In the age group between 35 and 44, two out of three respondents are interested. And in the 65+ age group, one third of media users are open to AVOD services.
Across all ages, 35 per cent of respondents are now interested in bundling their contracts with a super aggregator. Two years ago, the share was just 20 per cent. This enormous growth is mainly driven by the great popularity among consumers between 19 and 44 years of age. In these age segments, almost every second person is open to super-aggregation. The greatest interest is in those user groups in which the largest proportion of heavy users can also be found.
