More Aussies are choosing ad-supported streaming services

Ad-free television was one of the strongest selling points of streaming video-on-demand (SVOD) services like Netflix when they first launched but new research from Telsyte suggests that cheaper, ad-supported plans have become a popular choice amidst ongoing cost of living pressures. 

Year on year, the entire entertainment subscription market has grown by 5%, reaching 52.3 million service subscriptions in Australia. That includes video, music and gaming subscriptions like Xbox Game Pass. 

SVOD service subscriptions, like Netflix, grew by 4% alone year-on-year, while music streaming subscriptions grew by 9% and gaming subscriptions by 6%. 

Telsyte attributes music streaming growth to the launch of TikTok Music, a Spotify competitor from the popular social media company. However the SVOD subscriber growth is more notable in such a mature market, especially with ongoing cost of living concerns. Telsyte attributes that growth to two major factors: a population increase and increasing interest in the cheaper, ad-supported plans offered by Netflix, Binge and Paramount+. 

At the start of the 2023/2024 financial year, Netflix replaced its regular Basic plan with Basic with Ads, making the first ad-free tier plan the $16.99 (at the time) Standard tier. Now over a year later, Netflix has again tweaked the formula, changing the cheapest plan to the Standard with ads, a $7.99 per month plan that offers all the benefits of the Standard plan (now $18.99 per month) with ads. 

Naturally, other streaming services have begun following Netflix's lead, as they had before with password-sharing crackdowns. In Australia, Paramount+ and Binge both offer similar ad-supported options on their cheapest plans. 

Now, you might think that it's less a matter of Australians choosing ad-supported plans and more that streaming services like Netflix are forcing ads on us. But Telsyte's survey reports that one in two Australians are interested in a cheaper, ad-supported streaming plan and that ad-supported subscriptions have increased from 1 million in 2023 to 2.5 million in 2024. 

Additionally, more niche streaming services like Britbox, with plan offers under $10 per month grew collectively by 1%. 

As more services are expected to adopt ad-supported pricing models, Telsyte anticipates further market growth over the next few years, going from 3.5 to 3.7 subscriptions per household on average by 2028.