Skip to Content

Study: Ad-Supported Tiers More Attractive to Consumers Across the Board

Matt Tamanini

As streaming continues to butt up against saturation in the United States, it is no surprise that services are looking for ways to increase revenue, even as subscriber growth slows — or in the case of Netflix declines. Whether by offering new ad-supported tiers or cracking down on password sharing, services across the board are adapting in order to better do what they were always designed to do, make money for shareholders.

And while adding lower-priced, ad-supported options might seem like a cynical effort to attract as many customers — and their subscription dollars — as possible, these more budget-friendly tiers are increasingly what consumers prefer over the seemingly outdated premium, ad-free options.

According to Kevin Tran from research company Morning Consult, adults from all generations across every major race and ethnic background prefer the free or lower-cost, ad-supported streaming plans to the higher-priced ad-free versions. While respondents are likely always going to err on the side of cheap or free — depending on the way survey questions are phrased — the Morning Consult numbers are pretty unambiguous; Americans are over their need to stream without commercials.

By a margin of over 2-to-1, American adults said that they prefer the ad-supported streaming option. Of the four generations included in the findings, Millennials were the lowest in terms of the ad-supported preference, but 51% still preferred the cheaper option over the 39% that would opt for the ad-free experience.

Conversely, Baby Boomers, who came of age before the advent of streaming, and have been conditioned all of their lives to watch commercials, are the least interested in ad-free options. Only 17% of respondents from the older demo said that they preferred the higher-priced premium experience over 61% who opted to pay less, but to watch commercials in exchange.

According to Morning Consult, in the survey, “respondents were asked if they prefer to subscribe to a low-cost/free streaming service supported by ads or a high-cost, ad-free streaming service.”

Demo High-Cost Streaming Service without Ads Low-Cost or Free Streaming Service with Ads
All Adults 27% 57%
Gen Z Adults 29% 59%
Millennials 39% 51%
Gen X 26% 59%
Baby Boomers 17% 61%
White 28% 57%
Hispanic 36% 52%
Black 20% 57%
Other Race or Ethnicity 31% 51%

Despite the disruptive influence that streaming has had on the entertainment world, the industry as a whole has been slow to evolve in certain ways. But, with major services adopting advertising and more and more studios rolling out free, ad-supported services, customers are finally being met where they are. The impetus for many to initially cut the cord was the exorbitant price of cable and satellite services and over the years those prices have migrated from traditional TV to streaming.

Now, services are finding ways to give customers what they want, while also maximizing profits. While providing a premium, ad-free experience might have been important to attract customers in the early days of streaming, it is clearly not important to the majority of consumers anymore. And given the dual nature of revenue generated via ad-supported subscription options, it wouldn’t be surprising if its not want the services want anymore either.

DIRECTV STREAM Cash Back

Let us know your e-mail address to send your $50 Amazon Gift Card when you sign up for DIRECTV STREAM.

You will receive it ~2 weeks after you complete your first month of service.

Sling TV Cash Back

Let us know your e-mail address to send your $25 Uber Eats Gift Card when you sign up for Sling TV.

You will receive it ~2 weeks after you complete your first month of service.

Hulu Live TV Cash Back

Let us know your e-mail address to send your $35 Amazon Gift Card when you sign up for Hulu Live TV.

You will receive it ~2 weeks after you complete your first month of service.