You’d rather watch ads than pay more for Peacock

In early 2023, Peacock dropped its free, fully ad-supported tier in favor of an ad-free plan at $9.99 and an ad-supported option at $4.99. As it turns out, for most people, the value of watching Peacock is less than five dollars a month.

Peacock’s ad-supported plan drove 69% of the streamer’s subscriptions in 2023, according to new data from research firm Antenna. Compare that to the industry average: A third of streaming consumers overall chose a supported option. from advertising (if available) this year.

Antenna also found that how consumers select a plan isn’t tied to household income or any other single demographic. Selecting a plan seems to be more tied to the service itself, including content, ad integration, and ad upload.

A Peacock insider told IndieWire that the “vast majority” of Peacock’s 22 million paid subscriptions as of March 31, 2023 are on its cheapest “Premium” plan. (Peacock’s registration page describes the ad-supported plan as his “most popular”. Truth in advertising!)

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According to Antenna, 25 percent of all “premium SVOD” subscriptions — Netflix, Max, Disney+, Hulu, Paramount+, Discovery+ and Peacock — include advertising. (Apple TV+ and Amazon Prime Video don’t have this option.)

31% of new Paramount+ subscribers in 2023 chose to pay less and watch ads. For Disney+, the rate was 36%. Discovery+ is the closest to a fair split, with 43 percent choosing to watch commercials and save some money.

To date, in 2023, only 18% of Netflix subscribers have chosen an ad-supported plan, per Antenna; The maximum is 21 percent. The most premium of the SVODs remains premium.

Among premium PVODs, Peacock was an ad-supported pioneer. Through (mostly) no fault of its own, it launched in April 2020 as a disaster. The pandemic disrupted film and television production, delayed NBC’s Tokyo Summer Olympics until 2021, and gave the streamer little value to offer. Peacock made the service free for a time and later added the now-defunct free tier to the ad-supported paid service. Three years after its launch, it seems the Peacock’s value proposition hasn’t grown much.

The only other streamer to see more than half of its current ad support subscriptions is Hulu, at 58%.

Hulu launched in 2008, long before Peacock, as an advertising-based service. At the time, it was a joint venture between NBC, Fox and ABC made up mostly of broadcast programming, shows built around commercials.

At the end of March, Hulu had 48.2 million subscribers across its tiers. Like Peacock, Hulu’s similar slant toward ad-supporting isn’t a Bad What; it’s just a different revenue stream. If the levels are priced appropriately, some semblance of equilibrium is probably best, or at least safer in an uncertain economic environment.

Oddly lopsided is Netflix, which introduced its ad-supported tier late last year. With 232.50 million paid subscribers worldwide, the league leader is still getting the highest percentage of ad-free signups. Hey, if ARPU (Average Revenue Per User) fits…

Three years ago, 64 percent of U.S. video streaming subscribers avoided an ad-supported plan when presented with the option, Antenna said. Now, the majority (58%) “have chosen advertising for some or all of the time,” the company wrote, which makes for an “extraordinarily optimistic story for the ad industry.”

For the ad industry, sure, but for Peacock? You know what? It’s a holiday weekend, let’s end with optimism.