The shocking news from Netflix in April that it lost subscribers in the first quarter for the first time in a decade — and expects to lose more in Q2 — has led some to examine the limits of what the subscription streaming model can do, as well as its long-term viability. At the same time, Netflix has announced that it will launch an ad-supported tier, possibly as soon as later this year, despite insisting for years that it had no interest in doing so.
And while this new plan runs counter to much of what Netflix has built its streaming empire on, a new survey released this week indicates that perhaps advertising in streaming is the direction that audience viewing preferences are heading.
The survey, released by DeepIntent in partnership with LG Ads Solutions, found that 64% of connected TV (CTV) watchers “prefer to see ads than pay more for content.”
DeepIntent surveyed 2,900 U.S. adults, all of whom use LG smart televisions. The survey also found that while 96% of linear TV viewers said that they watch their favorite shows exclusively via their cable or satellite boxes, data from their TVs said otherwise — in fact, only 48% of their viewing was through a box. This indicates that perhaps many TV viewers don’t pay close attention to how they’re watching their content, or that they don’t draw deep distinctions between their cable box and their native TV apps.
Other findings of the survey included that 65% of respondents said that targeted ads “improve their experience,” while 57% say “CTV ads are more relevant than linear TV ads.”
Netflix, at least until later this year, has never had advertising. But as its major rivals have begun to line up to challenge its streaming supremacy, several of them have offered ad-supported tiers, including Hulu, HBO Max, Paramount+, and Peacock. Disney is planning to launch an ad-supported version of Disney+ later this year.
Other streaming services, such as Pluto TV and Tubi, have found major success with a completely ad-supported model that offers no paid subscription version at all.