Market for TV streaming advertising to pass £1bn
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Two years after Netflix introduced commercials, streaming advertising is 30% of the size of traditional TV ad market. A little more than two years after Netflix moved to further disrupt the TV industry by introducing commercials, galvanising already fierce competition to grab budgets targeted at traditional TV, the market for streaming advertising in the UK will pass the £1bn milestone.
For the first decade of the streaming revolution the received wisdom, most fervently espoused by Netflix, was that the days of the TV commercial were numbered, with consumers willing to pay in return for an uninterrupted viewing experience. A combination of the cost of living crisis making consumers more open to paying less in return for seeing a few ads, and the growth potential in tapping a new revenue stream as subscriber growth petered out, has made the old-fashioned ad break the streaming winner of 2024.
By November 2022, when Netflix had its Damascene moment, launching a cost-conscious, ad-supported tier to reignite stalling growth, the advertising opportunity in the video-on-demand sector was already clear. That year the UK market – which includes free, ad-supported, on-demand TV services (Fast), including the Channel 5 owner Paramount’s Pluto TV, Fox’s Tubi and Samsung’s TV services – hit £746m.
At the time, the streaming advertising sector amounted to just under a fifth the size of the then £3.9bn traditional TV advertising market in the UK. By the end of 2024 the streaming ad market will have grown by more than £300m to £1.1bn to be 30% of the size of the under-pressure traditional TV ad market, which will shrink to £3.58bn, according to Ampere Analysis.
