In the not-so-distant past, streaming platforms competed to deliver a completely ad-free experience, drawing a clear line between themselves and traditional television. But in 2025, that narrative has shifted. Today, ad-supported plans have emerged as the dominant force in streaming growth. According to Antenna’s State of Subscriptions: Adds & Ads report, not only have ad-supported tiers gained mainstream acceptance, they are now reshaping how streaming services operate, how advertisers spend, and how consumers choose to watch.
From being viewed as a compromise to becoming the industry standard, ad-supported streaming has become a strategic pillar across services like Netflix, Hulu, Disney+, Max, Paramount+, and Peacock.
Almost Half of Streaming Subscriptions Now Include Ads
The rise of ad-supported tiers is not a slow evolution. It is rapid and measurable. Over the last two years, ad-supported plans have shifted from a secondary option to a mainstream choice for streaming audiences. Antenna’s latest data reinforces just how far adoption has come.
Between 2023 and 2025:
- The share of ad-supported subscriptions grew from 33% in 2023 to 46% by the end of Q1 2025
- During this time, ad-supported subscriptions grew by 32.7% year over year, while ad-free subscriptions declined slightly by 0.1%
This growth is mirrored in subscriber acquisition patterns. Ad-supported plans are capturing the majority of new customers:
- In Q1 2023, 44% of new subscriptions (Gross Adds) were ad-supported
- That share increased to 58% in Q1 2024, boosted in part by Peacock’s exclusive broadcast of the NFL Wild Card Game
- In Q1 2025, 57% of Gross Adds were ad-supported, maintaining dominance despite the absence of a similar sports event
These numbers confirm that ad-supported tiers are not just gaining share. They are driving the industry’s forward momentum, offering platforms a scalable and flexible model for sustainable subscriber growth. The consistency of growth across years also reflects consumer confidence in these plans as a standard way to access content affordably.
Majority of Streaming Users Have Tried an Ad Plan
Ad-supported streaming is no longer limited to occasional users or new entrants. It has become a near-universal behavior. Over the last few years, the number of people open to ads has grown significantly, demonstrating a shift in how consumers evaluate the value of a subscription.
- 75% of Premium SVOD subscribers have used an ad-supported plan at some point
- This is up 9 percentage points from the previous year, and 19 points over two years.
- 17.8 million individuals joined an ad-supported plan for the first time in 2024
These numbers reflect a normalization of ad-supported viewing, with users embracing flexible, lower-cost access to content.
Ad Plans Are the Primary Growth Driver
The fastest growth across streaming platforms is coming from ad-supported plans. While ad-free tiers may still be the gold standard for some, the real engine of subscriber additions today lies in the ad tiers.
Over the past nine quarters:
- Ad-supported subscriptions contributed 51.4 million net new adds, or 71% of total growth
- In Q1 2025 alone, 57% of all new subscriptions (Gross Adds) were to ad-supported plans
- Although this was slightly down from Q1 2024 due to a one-time spike during an NFL event on Peacock, the overall trend remains upward
This shows that ad tiers aren’t just an alternative but the preferred choice for new subscribers.
Platforms Are Gaining New Users, Not Just Downgrades
One concern about ad tiers was that they might merely attract existing ad-free users switching to cheaper options. However, the data shows that ad-supported plans pull in a broad mix of user types, including entirely new customers.
As of Q1 2025, among ad-supported subscriptions:
- 65% were from new users who had never subscribed to the service before
- 25% were win-backs, former users who had previously canceled
- Only 11% were from users who switched directly from ad-free plans without canceling
This mix confirms that ad-supported tiers are expanding the subscriber base, not cannibalizing it.
Loyalty: Ad-Supported Users Are Just as Committed
It has long been assumed that users who pay more are more loyal, but that assumption doesn’t hold up under scrutiny. Regarding retention and churn, ad-supported subscribers behave almost identically to those on premium tiers.
- In March 2025, monthly churn for ad-supported users was 4.96%
- Ad-free users had a slightly lower churn rate of 4.13%
- Using a survival analysis, retention after nine months was nearly equal: 43% for ad-free vs. 42% for ad-supported users
These results show that ad-supported subscribers are not significantly more likely to cancel, especially when normalized by the time they’ve been on the platform. Loyalty is driven more by content and experience than the presence or absence of ads.
Demographics: Ads Appeal to All Audiences
Another myth surrounding ad-supported plans is that they primarily attract lower-income or younger viewers. Antenna’s demographic analysis debunks that notion. Across age, income, gender, and ethnicity, the distribution of ad-supported and ad-free subscribers is nearly identical.
Age:
- Age groups from 18–24 to 55+ are evenly represented in both plan types.
- Only minor skews of 1–2 percentage points were observed, with older users slightly favoring ad-free tiers
Income:
- Income brackets show no meaningful difference in plan preference
- Even high-income households earning $200k+ are equally likely to subscribe to ad-supported tiers
Gender and Ethnicity:
- Women are 3 points more likely to choose ad-supported tiers
- Ethnic breakdowns closely match the general subscriber population, with only a minor skew toward white users in ad-supported segments
The conclusion is simple: Ad-supported streaming is a universal behavior, not a budget-only strategy.
Consumer Segmentation: The Rise of the “Ad Manager”
To better understand viewer behavior, Antenna breaks subscribers into four segments based on their response to ad-tier choices:
- Ad Avoiders (21%): Always choose ad-free plans
- Ad Takers (27%): Always select ad-supported plans
- Ad Managers (41%): Have chosen both ad-supported and ad-free at different times.
- Ad Oblivious (11%): Have never been given a plan choice (typically legacy or bundled users)
The most significant group is the Ad Managers. These consumers adapt based on content, platform, or cost, and their share is growing rapidly. In fact:
- Among users who encountered two or more ad-choice prompts, 86% selected an ad-supported tier at least once
- The Ad Manager group grew 29.6% in the past year, adding over 12 million people.
These subscribers are not loyal to a pricing model—they are loyal to flexibility.
Most Users Faced with Multiple Ad Choices Eventually Choose Ads
To explore consumer preference at a deeper level, Antenna analyzed users who were given multiple chances to choose between ad-supported and ad-free plans. This group provides critical insight into how viewer behavior evolves when repeatedly faced with value-based decisions.
Among users who encountered two or more ad-choice prompts:
- 68% became Ad Managers, switching between ad-supported and ad-free depending on content, price, or circumstance
- 19% consistently chose ad-supported plans and are classified as Ad Takers
- Only 14% consistently chose ad-free options and are classified as Ad Avoiders
This means that 86% of individuals who faced multiple Ad Choices have accepted ad-supported plans at least once. These viewers are not firmly planted in one model. Instead, they are thoughtful, flexible, and strategic. They are evaluating trade-offs and optimizing their streaming experiences accordingly.
For platforms, this segment is incredibly valuable. These users demonstrate openness to experimentation, willingness to adapt, and long-term engagement potential. They are not locked into one pricing tier or content format. They are simply looking for the best overall value.
What It Means for the Industry
The implications of this shift are substantial. Advertising’s re-emergence isn’t a regression. It’s a sign of a maturing ecosystem where all stakeholders benefit.
For Streaming Platforms:
- Ad-supported tiers bring in new subscribers without sacrificing long-term loyalty.
- They enable dual revenue models—subscriptions and advertising—creating more sustainable business economics.
- They reduce customer acquisition costs and lower churn volatility.
For Advertisers:
- Nearly 100 million users are now reachable through premium streaming inventory
- These users span every demographic and show strong engagement and retention
- Streaming offers the best of both worlds: high-quality TV-like placement with digital targeting precision
For Consumers:
- More plan options make streaming more affordable and accessible.
- Viewers can mix ad-free and ad-supported subscriptions based on need or interest.
- The trade-off between ads and price is now a conscious and informed decision.
Ads Are No Longer a Compromise, They Are the Strategy
The rise of ad-supported streaming is not an accident or a cost-saving measure. It is a response to consumer demand, platform economics, and evolving viewing habits. Ads have returned not as an interruption, but as a value mechanism—one that helps platforms grow, advertisers connect, and users access more content at a lower cost.
The narrative has shifted. Viewers are no longer asking how to avoid ads. They are asking when it makes sense to accept them. In the modern streaming economy, advertising is no longer a fallback. It is the foundation of future growth.
