Willingness to Watch Ads Rising, But Fewer Streaming Ads Can Be Good for Viewers and Advertisers
A new report from Hub Research shows that 64% of respondents said they’d rather save money than go ad-free.
Ad-supported streaming is no longer just a trend, it’s a fact of life. Amazon has become the latest streaming provider to incorporate ads, and will start showing ads for all current subscribers on Jan. 29 unless they upgrade to a more expensive tier. New data shared by Hub Research shows that as the market goes, customers are following, and willingness to stream with ads is on the rise.
- Hub’s data shows that 64% of users would rather save money on streaming than avoid ads in December 2023, up from 59% in June.
- Almost half of streaming users report they’re more likely to pay attention to ad breaks that are shorter.
- Streamers must do a better job of educating users about the differences between streaming plans.
Money Talks
The rise in ad-free streaming costs over the course of 2023 has been well documented. Customers have taken note; Hub’s new report indicates that between Dec. 2022 and Dec. 2023, the percentage of users who report they’re more interested in saving money using ad-supported streaming plans than they are in avoiding ads rose from 57% to 64%. That segment rose five percentage points between June and December of 2023, indicating the response to price increases has been as rapid as the increases themselves.
The average difference in price between ad-supported and ad-free tiers of Netflix, Disney+, Hulu, Max, and Peacock/Paramount+ is $7.30 per month, so there are clearly significant savings to be had from being willing to put up with ads.
Still, customer willingness to put up with commercials while streaming has its limits. Among Hub’s survey respondents, 38% said they would choose one streaming service over another if the chosen platform had fewer ads per break. Most critically, 46% say they’re more likely to pay attention to shorter ad breaks.
Fewer Ads, More Revenue?
The advertising market is just starting to recover after a very difficult 2022, and 2023 that saw a much slower rebound than many analysts were anticipating. Given that information, it would seem recommending the use of fewer streaming ads would be a counterintuitive proposition.
But Hub’s data shows that advertisers and streaming platforms should strongly consider shortening their ad breaks or incorporating fewer breaks. Most streaming customers think of a “reasonable” ad-break length is around one minute or less, and when streaming services offer smaller ad loads, the products advertised are perceived as higher quality by the viewer. Audiences are much more likely to pay attention to an ad break when they think the overall ad experience is good.
Given this data, it’s clear that some streamers should think about reducing their ad loads. Hulu is frequently mentioned among the worst offenders when it comes to bad commercial experiences, and services that get such poor marks might find that reducing ad loads will bring more attention to the ads those platforms do run. Advertisers will also pull in more revenue if users pay closer attention to the commercials they air.
Ad-supported streaming tiers bring in more revenue for providers than ad-free plans do, but Hub’s numbers show that providers can do more to get users signed up for plans with ads. Awareness is a start; more than 30% of customers to all top streaming platforms other than Netflix don’t know that the service even offers an ad-supported plan.
Raising awareness about the availability of ad-supported streaming options is crucial for providers. Nevertheless, it’s also a good sign that streaming services on the hunt for enhanced profits can take action to bring in more revenue per user without having to resort to a wave of big price increases on ad-supported plans, as happened with ad-free plans in 2023.
Hulu
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