Hulu has been the poster child for ad-supported video-on-demand (AVOD) services for years, but its reign as king might be coming to an end. A recent Whip Media study looked at customer satisfaction in relation to streaming services’ commercial marketing strategy and found that the OG ad streamer isn't winning any popularity contents especially when compared to its competition. On the other hand, HBO Max has just the right amount of ads to keep viewers interested in programming without feeling like they’re paying a monthly fee to the advertising companies.

The AVOD space has been very attractive for streaming services thanks to its high propensity to draw in additional revenue beyond that of the standard subscription; up to $3.5 billion in 12 months as suggested by some estimates. According to a report from Tubi, lower cost subscription tiers with ads have even been projected to surpass traditional streaming by the end of this year.

Netflix has been gung-ho about delivering a cheaper commercial-supported subscription plan since it started losing total subscribers earlier this year, with expected revenues topping $4 billion. While Hulu has been using an AVOD model since its inception, its primary parent company is planning on adding a similar pricing structure to its flagship streamer — Disney+ — as well. The latest Whip Media report suggests that might not be the best idea since Hulu has been singled out as having the worst commercial strategy of them all.

Of the five major streamers that have an AVOD subscription tier, Hulu gets the worst reviews in terms of commercials. Not only are 26% of customers very dissatisfied with the current amount of ads, but they also see too many of the same ones over and over again. A Hub Entertainment research report from January indicates that consumers aren't bothered as much by ads that are relevant and informative, so repetitive and bland commercials may be too boring for Hulu’s viewers.

“Hulu’s ad loads are known to be heavier than most in the industry and our results show that viewers have noticed,” the Whip Media study stated, indicating that Disney+ might want to look in a different direction for an AVOD strategy.

“HBO Max was the only service that users reported feeling the amount of commercials was less than expected. Their ad loads are very low at only 4 minutes per hour and HBO originals on the ad-supported tier do not carry any commercials.”

This isn’t the first time that Whip Media has found HBO Max to be the top dog in consumers’ eyes. Its June 2022 customer satisfaction study shows that over 90% of its audience is happy with their service, even though only 19% of its audience would hold onto the subscription if they could only have one streaming subscription. That honor went to Netflix, with over 31% of subscribers saying that they would keep the service under the same conditions.

Of course, that doesn’t mean that a Netflix AVOD option will be popular. With the streamer planning to launch a lower-priced subscription early next year, nearly three quarters of subscribers would decline to make the switch. The real question is whether subscribers would refuse ads thanks to Netflix’s traditional, premium ad-free experience, or if commercials themselves are the problem. The current Whip Media study suggests satisfaction rates between AVOD and subscription video-on-demand (SVOD) tiers isn’t all that significant.

Again HBO Max is the leader in satisfaction, though a 3% difference between AVOD and SVOD is hardly impressive. The same can be said for the other four streamers, with Hulu and Peacock having the largest gaps of 7% and 8% respectively. This might indicate that consumers who are willing to opt for the lower-priced option should not expect much of a difference in their satisfaction with the service.

Whip Media has kept a close eye on the streaming industry, carefully watching how new AVOD pricing structures may affect the overall market. While Hulu no longer appears to be the AVOD gold standard, streamers should look to HBO Max as an exemplar for how ads should be run on their services. After all, if one of the benefits of cord cutting is avoiding the commercial break, flooding subscribers with irrelevant ads is only going to have them searching for a streamer that respects their time as well as their wallets.