Study: Consumer Support For Ads In Streaming Services Remains Solid

Dive Brief:

• Fifty-seven percent of consumers report they would prefer watching ads if it meant saving $4 to $5 on a streaming service subscription, according to the latest findings from Hub Entertainment Research shared with Marketing Dive. The report also links shorter ad breaks to increased consumption.
• Respondents are twice as likely to opt for a streaming service that offers both ad-free and ad-supported tiers versus using a platform that only offers “limited ads.” The majority of consumers (65%) also report using at least one free ad-supported streaming service.
• The survey, conducted in November, comes on the heels of new ad-tier launches by Netflix and Disney+ and found that of those who already were subscribed to the two platforms, 35% and 24%, respectively, anticipate switching to the platforms’ ad-supported options. 
• Dive Insight:

During a year of persistent inflation and economic woes, ad-supported streaming is showing its potential. Over half of respondents to Hub’s survey said they would be willing to consume ads in order to save a few dollars, a level of interest that has seen little fluctuation this year, reports marketingdive.com. 

Streaming platforms have increasingly taken to ad-supported business models this year, but their roll out has come with some challenges. Netflix in November launched its ad-supported plan, which costs $6.99 and is less than half the price of its standard package, but it has reportedly so far fallen short of its predicted success. Disney+ launched Dec. 8, equipped with over 100 advertisers, but the new ad tier came with a higher price for its traditional offering of $10.99 each month compared to the previous charge of $7.99. The increase might help explain why one in 10 Disney+ subscribers anticipate dropping their subscription entirely, per Hub’s findings. 

Despite these concerns, the new additions are still drumming up interest. Aside from current subscribers looking to switch to Disney+ and Netflix’s ad-supported offering, 22% of those who do not subscribe at all to Disney+ now report an interest, with the same totals true for Netflix non-subscribers. The Q4 edition of Hub’s “TV Advertising: Fact vs. Fiction” study surveyed 3,001 U.S. consumers aged 14-74 who watch at least one hour of TV each week.

A bit more mature than the recent entrants, Discovery+ and HBO Max’s ad-supported tiers are top ranking for consumer sentiment. Of surveyed respondents who subscribe to the Discovery+ ad tier, 61% feel the number of ads during shows is reasonable, the highest total among ranked streaming platforms, followed by 53% of HBO Max ad-tier subscribers who feel the same way. Following it are Peacock (46%), Paramount+ (44%) and Hulu (43%).