NPAW survey: 76% of SVODs with no ads to introduce them within two years

Over three quarters of SVOD providers currently without ads will introduce advertising as part of their mix within the next two years, according to a survey for quality assurance specialist NPAW.

According to the NPAW global B2B industry survey, 76% of SVOD companies with no ad tiers today will be introducing ads in the next two years.

For SVOD services that do not currently offer tiers with ads, advertising revenues are firmly on the roadmap. The 76% that plan to change their business model will become either a a purely ad-based business or a hybrid one.

A majority of SVODs – 59% – plan to implement a hybrid model, with the main goal being to lower the price of subscriptions, according to the survey.

It is notable, however, that of the global sample of streaming platforms surveyed, 41% currently have a two-tier or hybrid business model, combining a tier with ads and a premium tier without advertising. In second place come FAST services with ads (23%), followed by subscription-based services with ads too (22%).

The traditional SVOD model, without ads, had the smallest sample representation at 15%.

The survey also found that while 39% of ad-based services don’t fully trust their ad server data, only 25% use third-party ad analytics.

However, in good news for companies such as NPAW, the survey found that 100% of ad-based services plan to implement a third-party advertising analytics tool this year. Some 34% say they will implement one within months, while 44% will deploy one by the end of 2023.

The survey found that 47% of streaming companies are already using a third-party video analytics tool to track platform performance and user behavior, while 39% plan to do so. The adoption of these tools is higher in the Telecom industry (54%) than in media and entertainment (40%), suggesting telcos started pursuing a data-driven approach earlier on, according to  NPAW.

“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 behavior and content preferences.”