IS IT TRUE THAT TV VIEWERS WILL DO ANYTHING TO AVOID ADS?

Up until recently, the narrative around ad-supported TV services was relatively straightforward: the popularity of streaming services like Netflix, coupled with steady pay TV subscriber losses, seemed to be signs that services with ads could one day be a thing of the past. And then, free streaming services with healthy ad loads emerged on the scene, bucking the anti-ad trend and attracting an enthusiastic base of viewers.

Hub’s “TV Advertising: Fact vs. Fiction” report revealed that the world is not divided into those who sometimes watch ads versus those who never watch ads. In fact, the vast majority of viewers watch TV from both ad-supported and ad-free sources. Nearly all TV consumers (95%) watch from at least one ad-supported source, and 79% also watch from at least one ad-free TV source, although the proportion is actually lower than the proportion using a source with ads.

Hub asked people how they feel about ads during TV shows, and nearly 1 in 5 said they can’t tolerate them. When asked which of three statements about ads comes closest to their own feeling, 17% say, unequivocally, that they would “never consider signing up for a TV service that has ads, no matter how much I like the shows”. Another one-fourth agree with the other extreme and say: “if I’m really interested in a show, it doesn’t matter to me if there are ads”. Lastly, nearly 6 in 10 fall between these two statements: “I can tolerate a certain number of ads, but if there are too many I’ll go elsewhere”.

However, when Hub added cost into the mix, the company found that most consumers are willing to trade-off whatever ad resistance they have for the opportunity to save money. Given the choice between a lower-cost ad-supported service and a higher-cost ad-free service—assuming the same content—most would choose the former. In fact, 58% say they would prefer an ad-supported service that costs $4-5 less per month than an ad-free service, versus 42% who would rather pay more to avoid ads.

Furthermore, the proportion who would choose a less expensive, ad-supported service over an ad-free services actually includes one-third of those who initially said that, on principal, they would “never consider” a TV service with ads. Among consumers who say they can’t tolerate ads, 30% would choose to watch ads if it means saving $4-5 per month (versus a more expensive, ad-free service).

When the researcher presented current Netflix subscribers with the hypothetical option of an ad-supported version of the service for $5 less than the ad-free version, nearly half say they would switch: 46% of current subscribers say they would opt for the ad-supported service for $5 less.

“What’s clear from these findings is that what matters to consumers is not whether ads are included in the content they watch, but how ads are delivered. Even consumers who say they’re categorically opposed to ads will use an ad-supported platform if the price and ad delivery are right,”  said Mark Loughney, Senior Consultant at Hub and co-author of the study.