Ad-Supported Monetization; Tale of two Industries

Ad-Supported Monetization

As I was reading about Netflix’s push towards Subscription plus Ad Supported model, which is proving to be a great success, I couldn’t help but reflect on our industry; Game Ad Monetization.

The parallel between streaming services and video games in their approach to ad-supported monetization is cunningly similar. Both industries are evolving, prioritizing user engagement, and redefining ways to generate profit. Below is my attempt to draw similarities between the two industries and their approach towards Ad Monetization.

Streaming Services & Ad-supported Monetization

  • The Pricing Play: Big names like Disney, Netflix, and Paramount have adjusted their pricing, subtly pushing users towards ad-supported tiers. Disney’s move to raise prices for its ad-free Disney+ and Hulu offerings while maintaining its ad-supported prices is a testament to this.
  • Consumer Adoption: Before these price tweaks, ad-supported tiers were already popular. With 40% of new Disney+ subscribers opting for the ad tier and Netflix’s ad-supported base doubling, it’s evident that users see value in these offerings.
  • Interesting Note: Counterintuitive as it may seem, the ad-supported model, though cheaper for users, is more lucrative for streaming giants. Every stream translates to ad revenue, often surpassing the one-time gain from subscription fees.
  • Consumer Sentiments: A significant 60% would choose ad-supported platforms to save a mere $4-$5 a month. What’s more, many don’t just tolerate ads; they see benefits, especially if they’re engaging and non-disruptive.

Online Games & Ad-supported Monetization

  • The Value Exchange: Gamers, much like streamers, are often ready to watch ads if it means in-game rewards. It’s a win-win for both users, who get added game benefits, and developers, who earn ad revenue.
  • Engagement is Key: Just as streaming services aim to provide non-disruptive ad experiences, game developers focus on placing ads that don’t break the gaming flow, ensuring players remain engaged.
  • Stable Revenue Streams: Many game developers now view rewarded video ads as a more dependable revenue source than the often unpredictable in-game purchases.

Balancing user experience with revenue generation is a delicate dance. Both industries need to ensure that their push for ad-supported monetization doesn’t repel their user base. It’s all about finding a sweet spot where profitability meets user satisfaction.

As the digital landscape continues to shift, these strategies will likely play a pivotal role in shaping the future of online entertainment beyond Streaming services and Games!  If you are intersted in monetizing any website or online application, let the experts know!