Are Ad-Supported Tiers the Future for Streaming Stocks?

Ad-supported tiers are a growing trend in the streaming industry, with free, ad-supported streaming TV (FAST) services particularly rising in popularity. As the streaming wars continue to heat up, many platforms could benefit from a FAST tier. Here's why. 

Not very long ago, consumers viewed ads as more of a hindrance in video streaming than a welcome option. Consumers rarely saw quality programming alongside ads, with Netflix (NASDAQ: NFLX) co-CEO Reed Hastings rejecting the idea of "exploiting users with advertising" in the company's fourth-quarter 2019 earnings call.

However, times have changed. Demand for ad-supported tiers has risen, and Netflix and Walt Disney (NYSE: DIS) announced in early 2022 that lower-priced subscriptions with ads are being added to their flagship streaming platforms. While these memberships will likely require a payment, more streaming giants should consider a free option. Comcast (NASDAQ: CMCSA) published a report on July 21 illustrating the stark rise in FAST services with consumer use more than doubling since 2021 -- making it the fastest-growing streaming tier. Additionally, the company says 60% of households now use FAST platforms.

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Source Fool.com