Viewers Continue to Migrate to Ad-Supported Tiers as UK SVOD Growth Stagnates

Tim Cross-Kovoor 03 February, 2025 

As is the case in the US, the battle for subscribers between the major international streaming services seems to have largely stagnated in the UK. New data from UK measurement body Barb’s ‘Establishment Survey’, which measures the total number of UK households reached by each subscription video on-demand (SVOD) service, found that 20 million UK homes had access to at least one SVOD service in Q4 last year – the same number as in Q2.

And looking at figures for individual services, there’s been very little movement. Apple TV+ (up by around 200,000 households) and Now (up by around 20,000) were the only two services to see growth in the last six months of the year. Netflix and Disney reached the same number of households in Q2 and Q4, while reach for Amazon, Paramount+, and Discovery+ all fell. For these businesses, the streaming wars seem to have reached a stalemate.

Barb’s data did however show one significant change in the UK’s streaming landscape across the second half of the year. While Netflix and Disney’s total subscriber figures were unchanged, the number of households subscribed to their ad tiers grew significantly.

In Q2 last year, 2.78 million households subscribed to Netflix’s ads tier, out of 17.1 million total households with a Netflix subscription. Meanwhile 820,000 households subscribed to Disney+’s ads tier, out of 7.6 million total households. By Q4, total household reach for Netflix and Disney+ had grown to 4.7 million and 1.5 million respectively. Twenty-seven percent of UK households with a Netflix subscription are now signed up to the ad tier, and around 20 percent of households with Disney+ subscriptions.

Amazon, which launched its own ad-supported subscription tier at the start of 2024, hasn’t seen the same movement. Barb didn’t report on Amazon’s ad subscriber count in Q2, but between Q3 and Q4 its total household reach inched up from 11.5 million to 11.6 million. This isn’t surprising, since Amazon defaulted existing subscribers onto its ad tier, meaning the majority of its users were signed up as soon as it launched.

Positive for ARPU?

We can’t read from Barb’s data the exact dynamics behind the shifts in Disney and Netflix’s subscriber bases. It’s not clear whether existing subscribers to their ad-free tiers have switched over to ads, or whether existing subscribers have switched off completely, and been replaced by new users signing up to the ads tier.

But regardless of how it’s happening, the change will likely be welcomed by Netflix and Disney. Netflix has said that in the long run, it expects average revenue per user for its ad tier to be higher than for its ad-free tier, a trend also reported by other streaming services. Scale is key: until a service is able to offer sufficient scale, it will struggle to draw in advertisers. So the quicker users migrate over to ad-supported subscription tiers, the quicker ARPU for those tiers will catch up and overtake more expensive tiers.

As Doug Whelpdale, head of insight at Barb, pointed out, the majority of homes using Netflix and Disney still don’t see ads, meaning there is plenty of room for further growth.

Total household reach is just part of the equation. Total watch time and ad density also have a major impact on the volume of ad inventory which streaming services can sell, and the value of that inventory to advertisers. And given the apparent stagnation in the wider SVOD market, all these factors will likely be major focuses as streamers look to drive continued revenue growth.

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2025-02-03T15:52:47+01:00

About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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