Ad-funded content and super bundling: the future of streaming and subscriptions
Examine the effects of ad-funded tiers and super bundling on the streaming landscape, based on findings from Bango's Subscription Wars 2024 report.
The streaming and subscription industries are undergoing notable changes, as indicated by recent research from Bango's Subscription Wars 2024 report. This report, which gathers data from over 5,000 US subscribers, reveals trends and attitudes towards the industry, particularly regarding ad-funded content.
With Prime Video introducing ads, there has been a marked increase of 36% in US subscribers choosing to upgrade their services. However, the inclusion of ads also presents challenges, evidenced by 31% of subscribers cancelling services following the introduction of ads, and a significant 78% expressing opposition to 'premium ad tiers'.
Enricko Lukman
Super bundling
Additionally, the report addresses the effects of stricter password sharing regulations implemented by companies like Netflix, which has led to a 35% rise in individuals paying for previously shared services. Despite these measures, a substantial portion of subscribers (35%) continue to switch between platforms, utilizing the flexibility to pause and resume subscriptions as desired. This behavior highlights an ongoing preference for flexible and varied platform experiences.
The concept of 'Super Bundling' and subscription hubs, as seen with the launch of services like Verizon +play, is gaining traction. These services, which combine multiple subscriptions in one place, appear to respond to a subscriber preference for centralized management of services. The report indicates a reluctance to revert to traditional cable TV packages, with a preference for mobile providers over cable companies in managing these hubs.
This shift suggests a potential for simplifying the management of digital services, potentially leading to a more organized digital subscription environment.
Implications for the media industry
The 2024 outlook for streaming and subscription services suggests significant industry shifts, prompted by changing consumer demands for choice and simplicity. Bango's Subscription Wars 2024 report highlights the nuanced perspectives on ad-tiering and the emergence of subscription hubs.
For stakeholders in the media industry, these trends point to the necessity of adapting to changing consumer expectations. Emphasis should be on understanding the implications of ad-tiering, both the opportunities and challenges it presents, and the strategic importance of offering flexible subscription models.
Companies like Spotify and Hulu serve as examples of how to navigate the introduction of ads within subscription models. Spotify offers both an ad-supported and a premium option, meeting various user preferences, while Hulu provides choices between ad-supported and ad-free viewing experiences.
These approaches reflect strategies for accommodating different viewer preferences, suggesting a path for other brands to follow in managing subscriber satisfaction amid the introduction of ads and the evolution of subscription models.
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