A new study by video analytics and business intelligence company NPAW has found 76% of subscription-based video on-demand (SVOD) companies plan to introduce ads by 2025.
The preferred path is a hybrid model where an ad-supported tier would sit alongside a premium, subscription funded tier. All of those responding agreed the ultimate objective was to lower the price of subscriptions.
NPAW’s 2023 State of Streaming Advertising and Analytics survey interviewed 250 online video business owners from around the globe about their business models, advertising, and measurement practices and challenges.
“It’s encouraging to see that more and more companies are taking a data-driven approach to running their video business, especially as the industry’s shift to ads brings a unique set of measurement challenges,” said Till Sudworth, Chief Marketing Officer of NPAW. “To truly make the most of their advertising-based streaming business, video providers will need an advanced, third-party ad analytics tool — one that can help them track ad performance from an end-user perspective and correlate that information with insights about user behaviour and content preferences.”
Adoption of third-party video analytics is well underway, especially in the telecom industry. About half of streaming companies (47%) are already using a third-party video analytics tool to track platform performance and user behaviour, while 39% plan to do so. The adoption of these tools is higher in the Telecom industry (54%) than in Media & Entertainment (40%), suggesting telcos started pursuing a data-driven approach earlier on.
100% of ad-based services plan to implement a third-party advertising analytics tool this year. Despite the still fairly low adoption levels of third-party ad analytics tools, all ad-based streaming companies currently not using one are planning to do so this year. 34% say they will implement one within months, while 44% will deploy one by the end of 2023.