Ad-supported VOD subscriptions are experiencing significant growth in the U.S., reaching 43% of all subscriptions among services offering ad-supported plans in Q3 2024, according to new data from Antenna.

Key findings from the report:

• Netflix saw 44% of new subscriptions coming from ad-supported tiers
• Max reached 39% in ad-supported subscriptions
• Disney+ achieved 62% of new subscriptions from ad-supported plans
• Overall ad-supported share increased from 32% in Q3 2023 to 43% in Q3 2024
• Quarter-over-quarter growth from 39% to 43% between Q2 and Q3 2024

This trend may be attributed to rising subscription costs, economic pressures on consumers, and stricter account-sharing policies.

Impact on Music Streaming:

• Spotify currently has 402 million ad-supported monthly active users (MAUs)
• 55% of Spotify's total MAUs are now from regions outside Europe and North America
• Growth in mature markets like the U.S. appears to be slowing

Challenges for Music Streaming:

• Ad-supported listening generates significantly less revenue than paid subscriptions
• Apple Music, without an ad-supported tier, reportedly leads in U.S. Individual subscribers
• Major labels are pushing for paid ad-supported listening in established markets
• Subscription streaming growth is showing signs of deceleration at major services

These trends suggest potential changes in streaming service pricing and compensation models as we move into 2025, particularly in mature markets where freemium models may need reassessment.

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