Streaming has thrived, increasing by 48% in a span of three months between Q3 and Q4 last year. With consumers finding cost-effective alternatives within the AVOD industry, new services are being released each month, according to data released by Verizon Media in March. With SVOD facing cost hardships as streamers begin to feel burdened by subscription prices, and begin sharing accounts to lower related costs. Customers have implemented various paid, free, and ad-supported streaming models.
While the vast majority of viewers regularly turn to premium, ad-free streaming like Netflix or Amazon Prime Video, TV ads are still reaching more viewers. Approximately 77% of viewers see ads across cable, live, or AVOD services, and 66% see ads via AVOD services of any kind. Affordability is the primary reason why viewers try paid or free AVOD services. And AVOD, particularly Paid AVOD, is delivering value, with 70% saying there is no difference in "price for value" when comparing SVOD to Paid AVOD.
The main reasons consumers gave for preferring AVOD is its affordability and value. 75% of viewers said that they would prefer if more streaming services offered cheaper, ad-supported subscription tiers, while almost half, 47%, said they were more interested in ad-supported streaming than they were a few years ago. A majority of respondants, at 83%, said they'd try an ad-supported version of their favourite service while just a little fewer said they'd consider an ad-supported version of a new service to save money. Improving the ad experience will make your advertising customers more successful. AVOD providers can look to cable TV as a guide, as 54% mentioned the cable TV ad experience as the benchmark for AVOD ad experiences.
However, about 39% of AVOD subscribers were annoyed by advertising experiences that they've considered upgrading to an ad-free version, while 23% actually have upgraded, usually Hulu, because of the flawed ad experience. The risk here is AVOD services without an ad-free upgrade option risk losing their viewers to other services that irritate viewers less. 60% say commercial breaks are too long, 60% feel there are too many commercial breaks, 58% see the exact same ad play over and over in the same or consecutive shows, 53% dislike commercials that occur in the middle of the action, where there isn't a natural break, 52% blame AVOD commercials that occur right at cliff-hanger moments.
The 2021 CTV Growth Opportunity Report 2021 CTV Growth Opportunity Report also made interesting comments regarding advertising. A quality ad experience was found to be critical, however, as nearly a quarter (23%) of AVOD subscribers said that they had switched to a paid, ad-free version of a service because of a bad ad experience. Bad ad experiences ranked include overly long commercial breaks at 60%, too many commercial breaks at 60% and repetitive ads at 58%.