Historically, Memorial Day Weekend has been the biggest movie weekend of the year, kicking off blockbuster season. Even just two years ago, Top Gun: Maverick became the highest-grossing Memorial Day Weekend release of all time. This year, the summer blockbuster kick-off was an absolute dud — becoming the worst performing Memorial Day Weekend box office in the last 30 years. How did the industry go from highest-performing weekend of all time to worst-performing weekend in just two years? From production delays to rising ticket prices, there are a lot of contributing factors to the recent downfall of the box office performance. However, one of the largest contributing factors is how quickly theatrical releases come to at-home streaming services. Sometimes, the newest movies are released on streaming in a matter of weeks. User behavior and expectations with streaming have rapidly changed over the last two years, and so have the advertising opportunities for small businesses.
Rise in Ad-Supported Streaming
Studios have shifted their strategy away from theatrical release so they can focus on original streaming content. In fact, Amazon, Disney and Netflix reportedly spent $23 billion on original streaming content in 2o23. With every major studio releasing their own streaming platform, the competition to reach households got harder over the last few years. Almost all streaming services have adapted their business models to include a cheaper ad-supported tier level in addition to their premium ad-free plan. Ad-supported plans and live-event streaming events are gaining popularity, especially with millennials:
- In Q1 of 2024, ad-supported models are the most popular pricing tier, with around 55% of users opting for free streaming services.
- Over 50% of U.S. sports fans are willing to subscribe to a streaming service to watch their favorite sport live.
- A recent study revealed that revenue share for Universal on a premium digital release is close to 80% compared to roughly 50% from theatrical.
An increase in ad-supported streaming provides a lot of opportunities for businesses of all sizes to advertise across all these individual platforms — each with their own niche audiences, original content and older IP library. Streaming provides a much individualized user experience, resulting in more accurate user analytics that will drive better results for advertisers.
Smaller Screen, Bigger Impact
Advertising on these platforms is much easier and more accessible than traditional cable television commercials. With self-service advertising platforms, there are no more expensive packages with preferred channels and air times. Businesses of all sizes can now run and manage their own commercials start to finish. Advertisers can select audience types by demographics, geographics and interests, as well as set their own budgets and upload their own media.
Is streaming advertising worth it?
- On average, subscribers of streaming services spend around 3 to 4 hours per day binge-watching content.
- On average, streaming TV ad prices can range from $10 to $30 CPM (cost per thousand impressions).
- There will be 80 million cord-cutting US households by 2026.
Viewers have welcomed back advertising for the sake of cutting back on costs. As studios focus more on original streaming content and landing live-sports deals, streaming will only become more powerful in the near future. Advertising on streaming platforms delivers a much more personalized approach, which will result in higher revenue for businesses.
Katava Marketing is a full-service marketing agency that provides world-class marketing strategy and support to businesses of all sizes. With an in-house digital marketing team and video department, we are devoted to helping you deliver high-quality video content that will drive results. Contact us today at (973) 998-8008 or contact us to get started.
