Brian Morrissey, Media Analyst and Founder of The Rebooting, said: “The reality of the publishing industry is that you really cannot have an original content model that is mostly or solely reliant on display advertising revenue. Ad money is being eaten by retailers because they have really good data of what people purchase.”
Yet some publishers are thriving in the current market. The New York Times, often cited as the blueprint for a sustainable and scaled content business, prioritises cross-product ‘bundle’ sales with advertising having to fit within a broader vision for user experience. Niche publications like Washington DC-based Axios, Punchbowl and Politico, aim their products at influential audiences in the US capital.
Globally, 57% of consumers cutting back on SVOD subscriptions favour ad-supported streaming services
While no longer sufficient to support many media owners in isolation, advertising remains an attractive, high-margin source of revenue.
Netflix recently pivoted to advertising, signalling a watershed moment in video and audio streaming. Disney+ and Warner Bros Discovery have adopted ‘hybrid’ paid and ad-funded models. Audio streaming platform Spotify is improving margins through more sophisticated podcast advertising.
Laura Chaibi, Director, International Ad Marketing and Insights, Roku, said: “After years of proliferation of SVOD services, key media players are now moving to ad-supported business models to cater to consumers’ desire to access content for free and save money.”
Data from Roku found that 47% of streaming viewers plan to make changes to their services in the next 12 months. And according to GWI, 57% of those cutting back on SVOD subscriptions favour ad-supported streaming services.