From Prestige to Performance: Rebuilding Streaming’s Monetization for Scalable Growth
With subscription prices climbing and consumers increasingly selective about what they pay for, the pressure on streaming platforms to find sustainable revenue streams is higher than ever. Ad-supported services face a particularly tough challenge: low fill rates. Unlike traditional broadcast, which sold a handful of premium ad spots per hour, streaming has increased liquidity of inventory exponentially. But brand budgets haven’t kept pace, requiring many platforms to double their upfront sales just to reach healthy fill levels – a gap that performance advertising could help close.
The challenge lies in balancing two very different sets of expectations. Performance buyers demand measurable return on investment at the lowest possible cost per thousand impressions (CPMs), while brand buyers view high CPMs as a proxy for quality. Simply slashing CPMs to attract performance spend risks undermining a platform’s premium positioning and exposing steep discounts to brand buyers.
The solution isn’t necessarily about discounting, it’s about selling differently. Brand campaigns purchase reach and audience on a cost-per-impression basis. Performance campaigns purchase outcomes on a cost-per-action basis. While this shifts more risk to the publisher, with the right machine learning and optimization it can unlock previously untapped revenue without eroding brand value.
Why CPM Alone Leaves Too Much Revenue on the Table
In the broadcast era, advertisers bought ads by the minute and most inventory sold out. Streaming changed that dynamic. Millions of impressions are available per hour, sometimes from audiences outside the brand’s target set. Yet with budgets still structured for a pre-streaming world, brands haven’t scaled to meet the inventory this demands, leaving much of it unmonetized. The result is vast quantities of unsold ad space and lost revenue, even at strong CPMs.
The limits of CPM-selling monetization are clear: overreliance on price-per-impression models constrains fill rates and reach. Platforms can’t simply raise CPMs to maintain perceived premium value while leaving large portions of inventory idle. This fixation overlooks the opportunities in performance-based advertising that could make every impression productive. To maximize revenue in today’s streaming environment, it’s essential to rethink what success looks like and consider metrics beyond just CPM.
How RPM Captures Performance Dollars Without Undermining Brand Campaigns
It’s long been assumed that chasing revenue per mille (RPM) growth through performance advertising undermines premium brand deals. In reality, performance campaigns can complement brand efforts rather than compete with them. The key is balance. Brand campaigns drive awareness, prestige and audience perception, while performance campaigns deliver scale and consistency. By bringing RPM into the fold, platforms can capture the full value of their inventory.
In the broadcast era where there were high enough fill rates, RPMs and CPMs converged. In today’s day and age where streaming platforms face significant unfilled inventory, this is no longer the case and focusing on just CPM leaves substantial revenue untapped.
Platforms that look to attract performance budgets by lowering CPMs risk tension as brand advertisers may interpret this as a discount on quality, complicating upfront deals and potentially diluting premium brand positioning. Netflix, for instance, intentionally priced its ad-supported tier high to protect its inventory’s premium image.
However, when approached strategically, brand and performance campaigns can work in tandem and complement each other. Performance advertising delivers the consistency and scale that fills unused inventory, while brand campaigns maintain reach and prestige. RPM as a metric reflects the combined effectiveness of both approaches in fueling sustainable growth, ensuring platforms maximize the value of every impression.
Building the Infrastructure for a Performance-First Model
The problem in streaming isn’t a lack of supply or demand, it’s the outdated systems connecting the two. Many platforms rely on legacy infrastructure, limiting the ability to scale performance advertising effectively. To unlock the full potential of performance budgets, streaming services need smarter technology.
This includes advanced bidding systems that allow real-time, outcome-driven optimization; 1:1 personalized targeting powered by machine learning; and algorithms that match ads to viewers based on results, not just impressions. With these tools, platforms can ensure every ad placement is monetized effectively.
But the shift isn’t just technical, it’s operational and strategic. By selling premium audience access to brand buyers while offering outcome-driven, machine learning-optimized deals to performance advertisers, platforms can fill more slots and boost overall revenue without eroding brand value. The result is a stronger, more predictable monetization engine for streaming that is also capable of scaling alongside the industry’s growing inventory.
A More Sustainable Path Forward for Streaming Monetization
The evolution of ad-supported streaming highlights the limitations of focusing solely on maintaining high CPMs. With large portions of inventory going unsold, platforms need to rethink what monetization looks like and move beyond vanity metrics to maximize value and ensure every impression contributes to revenue.
Ultimately, the choice isn’t between prestige and performance. It’s about recognizing that both are critical to the long-term health of streaming businesses. By redefining success metrics, adopting smarter technology, and balancing brand and performance advertising, platforms can unlock the full value of their inventory and fuel the next phase of streaming growth. Every impression matters, and with the right approach, every impression can perform.
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