Consumers favor ad supported streaming

The resurgence of ad-supported TV is a notable trend in the streaming business, and advertising is a central feature of the viewing experience. As streaming services multiply and subscription costs rise, consumers are increasingly opting for ad-supported alternatives. Hub Entertainment Research's latest findings show that two-thirds of TV viewers prefer watching ads if it saves on subscription costs. This represents an eight-point increase over the past three years, indicating a significant shift in consumer preference. Hub's study explores this attitude shift and how viewers perceive and interact with ads across different platforms.

Normalization of ad-supported TV

Economic pressures and budget constraints push viewers to seek more affordable entertainment options. Hub's findings show that the percentage of consumers who express an aversion to ads fell from 17% three years ago to just 12% in June 2024. This decline in ad intolerance suggests that viewers are becoming more open to advertisements to reduce their overall entertainment expenses.

While viewers are becoming more accepting of ads, the presentation of the ads plays a crucial role in the quality of their overall viewing experience. Hub's study underscores that the ad experience significantly impacts viewer satisfaction and engagement. The number and length of ad breaks influence how reasonable viewers find the ad experience.

Ad-supported video-on-demand (AVOD) platforms offer lighter ad loads and a more favorable overall ad experience than free ad-supported streaming TV (FAST) services and traditional multichannel subscriptions. Nearly eight in 10 viewers agree that there are "big differences" in the amount of advertising presented on competing TV services. This perception highlights the importance of managing ad loads to enhance viewer satisfaction.

Amazon prime video's impact on the ad landscape

The introduction of ads on Amazon Prime Video has had a notable impact on the streaming landscape. Once a stronghold of ad-free content, Amazon Prime Video now includes ads by default. This change significantly reduces the proportion of viewers using ad-free streaming services to just three in five households.

Most Prime Video viewers now watch with ads. Only those who use Amazon as a hub for other subscriptions or consider Prime Video a primary benefit of their membership opt for the ad-free experience. This shift highlights ads' growing acceptance among viewers and the influence of major streaming platforms in shaping consumer preferences.

Role of content in attention to ads

Interestingly, the type of content viewers watch also affects their attention to ads. Participatory genres like talk shows, game shows, competition series, and mystery programs keep viewers more engaged during ad breaks. Certain content types can be more conducive to maintaining viewer attention, even when interrupted by ads.

Opportunities for growth in ad-supported offerings

Despite the increasing acceptance of ad-supported streaming, there is still significant potential for growth in this area. The study reveals that many viewers remain unaware of ad-supported offerings on major streaming services such as Disney+, Paramount+, Max, and Discovery+. Additionally, a significant minority believe these services are strictly ad-free.

This gap in awareness presents an opportunity for streaming platforms to educate consumers about their ad-supported tiers. Targeted marketing messages aimed at budget-conscious non-subscribers could help drive growth in these offerings. Providing viewers with more affordable options and expanding the reach of ad-supported streaming appears to be a win-win scenario.

The report findings indicate a strong future for the streaming advertising marketplace. As consumers continue to embrace ad-supported streaming to save on subscription costs, the demand for well-executed ad experiences will grow. Streaming services offering reasonable ad loads and shorter breaks will likely see better viewer attention and engagement outcomes. Understanding and catering to viewer preferences is crucial as the streaming industry evolves.

AVOD, FAST, streaming