Ad spending by leading SVOD services is up 87% in the 2 month period from March 15 to May 16, 2020 as compared to the same period of 2019, according to a new analysis from MediaRadar. SVOD competition has intensified as new entrants like Disney+, Quibi and HBO Max vie to gain awareness and a share of consumers’ video services budget.
MediaRadar found that YTD Disney+, Hulu and Quibi were the leading SVOD advertisers, collectively spending $135 million. However, each SVOD service’s spending has fluctuated in 2020. For example, MediaRadar noted that Netflix’s ad spending in April was down 11% vs. the prior year. That may be because Netflix was benefiting from stay-at-home guidelines with consumers proactively seeking out subscriptions.
Meanwhile Disney increased its spending on Disney+ and Hulu by 74% in the weeks after March 15 compared to the weeks prior. Amazon Prime Video ad spending was up 29% in the March 15 to May 16, 2020 period vs. the same period last year.
Quibi has dramatically slowed its ad spending. In the 4 weeks from April 19 to May 15 Quibi’s ad spending was down 82% as compared with the March 22 to April 18 period, which included April 6, Quibi’s launch date. Quibi’s subscriptions and viewership have not met expectations and the WSJ has reported that the company is both cutting costs and having discussions with early advertisers about restructuring early commitments.
MediaRadar also said HBO Max began advertising during the week of April 19; the service went live today. HBO Max has been promoted digitally on Snapchat, Yahoo, IMDB, Forbes and elsewhere and on TV on Time Warner’s own networks including CNN, TBS, and Adult Swim plus ABC and Fox. Spending tripled during the week of May 10, MediaRadar said.
SVOD services are likely to be aggressive advertisers in the coming months. Subscriptions to pay-TV services are dropping at record rates, so budget is becoming available for direct-to-consumer SVOD services. Peacock is also launching nationally on July 15 and Apple appears to be increasing investment in Apple TV+ to make it more of a contender. And with plummeting DirecTV subscribers, AT&T has a lot riding on making HBO Max a success.