Ad Prices for Streaming Services Drop as More Companies Embrace Commercials | Report

Max commands the highest prices for premium content, but lower costs are sending more advertisers to FAST channels

Taissa Farmiga (left), Carrie Coon and Morgan Spector in "The Gilded Age." (Barbara Nitke/HBO)

The cost of advertising on streaming services dropped sharply in the past year amid a flood of new ad space and continued sluggish demand, according to a Friday report in Business Insider.

The outlet reported that top streaming services like Netflix have slashed their ad prices since launching last year by about 30%, and the looming debut of ads on Prime Video next year is pressuring the market even more.

“Amazon has promised to dump a TV-sized audience of 115 million monthly US users into the streaming video ad supply,” the report said. “Unlike Netflix’s first forays into advertising, consumers will have to opt out and pay an additional $2.99 if they don’t want to see Prime Video ads, giving advertisers a large audience to target.”

More ad space to choose from is one of the biggest factors in the 5% to 10% overall drop in streaming ad prices since last year, ad buyers told the publication.

“There is absolutely inventory to buy,” said one top ad buyer.

The top streamers still have a pricing advantage over newer entries, with Netflix and Max commanding the highest rates. Max can cost up to $53 per CPM, or cost per mille, the average cost of one thousand ad impressions, and top streamer Netflix can still demand up to $55 for ads, down from a high of $65, buyers told BI.

Also pulling in top rates is ESPN+, which can command CPMs of $38 to $48 for its live sports feeds.

The next tier includes Peacock, which launched in 2020 with CPMs now running $25 to $42, dropping from between launch prices of $40 and $50, as the streamer added more supply. Paramount+ rates can also vary widely because of a variety of ways inventory is sold, with prices ranging from $15 to $34.

Disney+ Basic costs range from $22 to $40, the report said, while Hulu slides in with CPMs between $18 to $31. Disney+ prices are down from $50 in December, when the ad-supported service launched.

Hulu, like Disney+, has hiked the number of ads per hour it runs by 38%, or 7.3 minutes to offset sliding prices, the report noted. Buyers noted that the Disney buyout of the share of Hulu it doesn’t own could give the company more pricing power.

Amazon’ Prime’s Freevee service can cost up to $24 per CPM, while its Fire smart TV service prices between $20 and $24.

Ad prices for its ad-supported Prime Video service are expected to slot between $30 and $35.

YouTube Select ads can pull in up to $24 per CPM, but the service also negotiates separate deals for specific content like NFL Sunday Ticket.

Roku, and FAST streamers PlutoTV, owned by Paramount, and Fox’s Tubi can also pull in up to $24 per CPM, with the growing amount of content on the free services making them cheaper by comparison to other services because of the large amont of inventory they offer and their ability to target specific audience demographics.

Likewise, Smart TV services from LG, Samsung and Vizio offerings pull in CPMs of $15 to $24, the report said.

Buyers at seven big agencies told Business Insider that the market is beginning to even out as advertisers spread their spending around, particularly toward the lower-priced FAST channels.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.