Report: 75% of Consumers Say Ad-Supported Streaming is Practical Alternative to Cable
It appears Tubi is not satisfied to simply rest on its own accomplishments from 2022. Despite an increase in viewing time of 44%, and a jump in monthly active users from 51 million to 64 million for the free ad-supported video-on-demand (AVOD) service, the company also provides market research to the larger streaming landscape as well.
Tubi released findings of its annual “The Stream 2023: Actionable Audience Insights for Brands” report on Tuesday, and it holds some important insights for streamers. The survey shows that three out of four streaming users now think of AVOD sources like Tubi as a viable alternative to cable and satellite.
At first blush, that may seem shocking considering the difference in price between an ad-supported streaming service and a pay-TV subscription. At $75 a month or more, cable must offer better features than free streaming, right? But a closer look reveals that AVOD services come the closest to mimicking the cable experience, even if they don’t have nearly the breadth of new content. Most free streamers like Tubi offer both on-demand video and free ad-supported TV (FAST) channels, which air programming on a schedule and frequently host only one show or a genre of shows, much like cable.
AVOD services also often include a channel grid for ease of browsing, just as pay-TV interfaces do. That’s a very important feature, according to Tubi’s data. At a rate of 59% users of AVOD/FAST services expect the platforms they’re using to be easy to navigate. As time spent on content discovery creeps past 11 minutes on average for cord-cutters, it behooves streamers to make sure that users can find content they want to see easily, lest they turn to another service or simply turn off their TV altogether.
Moving slightly away from the world of streaming, the Tubi report carried yet more bad news for pay-TV providers. Over half of American TV watchers have cut the cord, and Tubi’s numbers indicate that 48% of remaining pay-TV customers are thinking about doing so as well. The tipping point for pay TV has come, as 2023 will be the first year that non-pay TV users in the United States will outnumber customers still using pay TV.
That might suggest to some that the competition for new subscribers isn’t quite over yet, but that’s not really the case. Non-streamers make up just 29% of the American TV audience, so even a huge increase in cord cutting won’t bring a huge rush of new streaming users to the market. Streamers have to worry more about keeping the subscribers they’ve already got, as 69% of streaming customers report they’re considering cycling through services in the next year.
Overall, Tubi’s data offers valuable insights, but it paints the same picture that most other numbers-laden reports are offering. Pay TV is nearly done for, but with the streaming market as crowded as it is, streamers have more work to do before they can declare victory.
Tubi
Tubi is a free video streaming service that includes on-demand access to 200,000+ movies and TV episodes - more than any other streaming service. Its ad breaks are shorter and less frequent than most free services. Fox executives have called their service “TV on steroids.”