Paramount+ is the latest streaming platform to jump on the ad bandwagon, with plans to bring out an ad-supported subscription tier next year.

Paramount said on Tuesday that Australia, alongside Canada, would get the advertising tier plan in 2024.

The monthly price was not revealed, but it will likely be less than the only tier currently available, which is $9.99 a month.

Another change is arriving sooner; from November 16, Paramount+ will offer a premium plan.

For $13.99 monthly or $124.99 annually, the premium plan will bring higher-quality formats (such as 4K UHD, HDR10 and Dolby Vision), as well as expand the number of people who can use the platform simultaneously by allowing four concurrent streams (instead of the two that come with the standard plan).

Paramount’s advertising tier will see the company follow Netflix and Disney+, which introduced ad-supported tiers last year (although the latter has not yet offered the option in Australia).

Last week, Netflix said it would phase out its basic plan in Australia, along with Germany, Spain, Japan, Mexico and Brazil.

Initially the move, which took effect this week, will affect only new or rejoining members, who will only be able to choose from two ads-free subscription tiers instead of three.

At $10.99 a month, the basic plan is currently Netflix’s cheapest ads-free tier. Its standard tier costs $16.99, and premium $22.99.

Ads likely to be ‘standard offering’

Victoria University senior lecturer in screen media Marc C-Scott said ad-supported tiers were likely to be a standard offering from streaming platforms, especially since Netflix had proved the move was profitable.

But other streaming platforms will have a “slightly different” rationale for introducing ad-supported tiers compared to Netflix.

“Netflix [is] the largest in terms of subscribers, and in terms of market share. So, it essentially was using ads as just a way of not losing subscribers, or giving them an opportunity to … drop their tier down,” C-Scott said.

“With the other subscription services … this is an opportunity for them to gain subscribers that may not necessarily want to have gone with them.

“So it’ll be more like, ‘OK, I’ve got Netflix, I really want Paramount, but I’m not prepared to pay the most expensive fee. But I’ll dip my toes in by signing up on the ad tier and seeing what it’s like’.”

Offering cheaper option subscription choices, even at the cost of subscribers sitting through ads, may be wise given the current economic circumstances.

Telsyte data released in August shows subscriber growth for subscription services slowed in Australia year on year.

The average number of streaming video on demand subscriptions per household sits at 3.4 locally; holding subscriptions to the cheapest tiers of the three most popular streaming platforms in Australia (Netflix, Prime Video and Disney+) would cost $371.64 a year.

Aussies used to ads

C-Scott said Australians are also likely to have less trouble readjusting to having their movies and series interrupted by ads compared to Americans and Brits.

“Australians have grown up with television that has had ads, and our subscription penetration rate for things like Foxtel has never really gone over 30 per cent of the population,” he said.

“That’s very different than the US and UK where you’re seeing [up to 80 per cent and 50 per cent, respectively] having paid television [which doesn’t feature ads].

“Ad tiers for subscription services could do better in Australia, purely if we’re looking at how the television landscape is set up in our country.”