UK Streaming Market Hits Turning Point with Majority Opting for Ad-Supported Plans
For the first time, ad-supported streaming subscriptions in the UK are expected to surpass ad-free subscriptions by the end of the year, with forecasts predicting just under 26.5 million ad-supported subscribers compared to around 23.1 million ad-free subscribers. This milestone marks an inflection point in the UK streaming landscape, signaling a shift away from the ad-free-first model that has dominated the market.
According to Ampere Analysis, this shift reflects changing consumer preferences and industry dynamics. Netflix, a key player in the market, transitioned from resisting advertisements to introducing a cheaper ad-supported tier about three years ago as a strategy to reignite growth following a slowdown after the Covid-19 pandemic. Notably, Netflix's cheapest ad-free subscription is priced at more than twice the cost of its ad-supported tier.
The average UK subscriber to multiple streaming services spends approximately £64 per month, representing a 14% increase from £56 in 2022. The growth of ad-supported streaming is also driving the expansion of the UK streaming ad market, which is projected to reach £1.38 billion this year. This figure more than doubles the market size four years ago and now accounts for roughly half of the traditional linear TV advertising spend, which stands at £3.15 billion.
Despite this growth, the impact on traditional broadcasters such as ITV, Channel 4, and Channel 5 has been limited so far. Ad breaks on traditional TV remain relatively infrequent, and advertisers show some hesitancy due to the high upfront costs involved. Leading advertisers on streaming platforms include prominent brands such as Apple, Sky, Tesco, Sainsbury’s, Indeed, Subway, Google, Paramount, McDonald’s, and BT.
