The most valuable streaming subscriber isn't the one paying premium for an ad-free experience. It's the one watching with ads.
That's the case EDO President and CEO Kevin Krim made on CNBC's Power Lunch this week, breaking down how the math of dual revenue streams (subscription plus advertising) is reshaping streaming economics and giving advertisers a highly engaged audience.
Check out the video and key takeaways from Kevin's conversation below, and explore more of EDO's latest research on TV outcomes measurement.
Dual revenue streams have worked for TV for a long time, but streaming has sharpened the formula. Ad-supported subscribers tend to watch as much (or more) content than their full-paying counterparts, and because ad loads on streaming are lower than on traditional TV, viewers are willing to tolerate the trade-off. The result is a better per-household revenue equation than the ad-free tier delivers on its own. "Hulu first showed it, then Peacock, and Netflix … is showing it really well," Kevin notes.
The advertising side of that equation is improving, too. Streaming consistently earns a higher rate per thousand impressions than traditional TV, helped by sharper targeting and tighter frequency controls. EDO's data shows that premium is justified: viewers engage more with streaming ads about two-thirds of the time. "The premium on streaming, the higher price being charged for the advertising, is worth it because the audience is more engaged with the ad," Kevin explains.
That engagement isn't always obvious to the viewer. "Ads are delivering information to you even when you don't fully appreciate and realize it," Kevin says. You see a new car, a new movie, or something that catches your eye, and you reach for your phone to search for it. Those searches are exactly what EDO measures, and they're predictive of the sale that comes later, giving brands a clear read on how their creative is performing across Netflix, Amazon, Peacock, and the rest of the Convergent TV landscape.
Watch Kevin's full conversation on Power Lunch, and explore EDO's latest insights on streaming and linear TV measurement.