An increasing number of TV viewers are accepting advertising in streaming video and they are readily able to discern the differences in how various services deliver the ad experience. Hub Entertainment Research released the latest wave of its semi-annual “TV Advertising: Fact vs. Fiction” survey, indicating that ad-supported streaming services are on the rise, and consumers have firm ideas on how advertising should be presented.
In just three years, the percentage of consumers expressing a preference for ad-supported subscriptions if it saves them money has increased by eight points to 66%. This shift indicates that two-thirds of TV viewers would now prefer watching ads if it reduces their subscription costs, reflecting a waning intolerance towards advertisements.
At the same time, the number of consumers saying they can’t tolerate ads has declined from 17% three years ago to 12% in June 2024. However, even the majority of viewers who are open to advertising recognize when the ad loads become unreasonable, and they respond by diverting their attention away from the ad breaks.
Most viewers can differentiate among TV services in how advertising is presented. Nearly eight in ten viewers agree there are “big differences” in the amount of advertising presented on competing TV services. And by far, AVODs are providing better ad experiences than FASTs and multichannel subscribers.
The ad experience significantly affects viewers’ enjoyment and attention levels. The number of ads, as well as the length of the breaks contribute to how reasonable viewers rate the experience. And both factor into evaluations of the viewing experience.
The rollout of Amazon Prime Video’s ad offering provided further and stronger evidence that consumers prefer watching ads to price increases to stay ad-free. The proportion of consumers saying they watch an ad-free SVOD tumbled since December from 84% to 58%, coinciding with the launch of advertising as the default on Amazon Prime Video.
Although most of the major streaming services launched lower-cost ad-supported plans more than a year ago, substantial numbers of viewers remain unaware. A third or more of consumers say they don’t know about ad-supported offerings on Disney+, Paramount+, Max, and Discovery+, and a substantial minority incorrectly believe those services are strictly ad-free. There is an opening to grow the ad-supported tiers with marketing messages targeted to budget-conscious non-subscribers of these services.
Over the past three years, an inexorable movement among consumers toward greater acceptance of advertising in streaming video has been seen. The most recent study wave shows no sign the trend is ending.
“Over the past few years, the video ecosystem has seen fundamental change, with nearly all of the formerly ad-free streamers adding a lower cost ad-supported tier,” said Mark Loughney, Hub Senior Consultant. “Consumers have responded not by rejecting advertising or canceling subscriptions, but embracing the opportunity to save on their monthly subscriptions. By putting forth an overt offer of lower fees in exchange for watching a reasonable number of ads, the streaming services have given consumers a better value proposition. As a result, the future of the streaming advertising marketplace looks very bright.”
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