27 OCT 2022

Why are ad-supported streaming offers so appealing to young families?

Cheaper ad-funded tiers like the ones Disney+ and Netflix will launch by the end of this year could prove an effective way for families to reduce their spend on video services, Ampere Analysis noted in its latest report.

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Disney+ and Netflix have both confirmed plans to launch a cheaper, ad-funded tier alongside their usual subscription service in a range of markets, with both set to launch in the United States by the end of 2022. Netflix also recently announced that subscribers taking its ad-funded tier will not see adverts when watching via a child’s profile, or around content aimed at under 13s, bringing the streamer’s plans in line with rival Disney+.

Young families have long been a valuable audience for SVOD platforms, with 95% of US households with children under 10 reporting having access to at least one such service, Ampere Analysis noted in its latest report. On average, this group of subscribers also take more subscription video services: 5.1, against a market average of 4.5.

According to Ampere, this extra choice creates a potential issue, though: 46% of families report that they feel overwhelmed by the number of services they have access to, compared to 38% in the United States overall. This could lead to families looking to drop services, particularly with the cost of living increasing worldwide.

The report also indicates that cheaper ad-funded tiers could prove an effective way for families to reduce their spend on video services: 60% of households with young children in the United States said they would be willing to see adverts if it made a subscription cheaper, compared to a 49% average in the market overall.

“Keeping adverts away from kids content, but running them against the rest of the available titles, allows Netflix and Disney+ to provide a cheaper service for households looking to save money, without lessening their appeal for family viewing,”  commented Annabel Yeomans, Senior Analyst at Ampere Analysis and the author of the report.

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