NPAW: Three-Quarters of SVODs to Introduce Ads by 2025

According to a new global B2B industry survey by NPAW, 76 percent of subscription-based video-on-demand companies plan to introduce ads in the next two years.

NPAW’s 2023 State of Streaming Advertising and Analytics survey interviewed 250 online video business owners from around the globe about their business models, advertising, and measurement practices and challenges.

Implementing a hybrid model (an ad-supported tier plus a premium, subscription-based one) is the preferred path for 59 percent of them—a move all the respondents agreed is aimed at lowering the price of subscriptions.

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

Ad server data is a first step toward understanding ad performance, but it only paints a partial picture, NPAW says. And 39 percent of ad-based services don’t fully trust their ad server data. However, only 25 percent are using a third-party advertising analytics tool in addition to or instead of their ad server.

Despite the still fairly low adoption levels of third-party ad analytics tools, all ad-based streaming companies currently not using one are planning to do so this year: 34 percent say they will implement one within months, while 44 percent will deploy one by the end of 2023.

“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.”