Tolerance for Streaming Ads Grows Markedly as Viewers Try to Control Costs
According to Hub Research, the number of viewers who say they can’t tolerate any ads at all has seen a big dip in the past three years.
Streaming services don’t just want to offer advertisements, they want to become leading deliverers of ads. Some streaming services have even been accused of trickery when it comes to the methods they use to pull in ad revenues, which shows just how important ads have become in a video medium that used to pride itself on being ad-free. The growing prevalence of ad-supported streaming has not been met with a revolt from customers, and new data from Hub Research shows the tolerance among viewers for streaming ads has grown precipitously in the past three years.
Key Details:
- In 2021, 42% of customers said they’d rather avoid ads than save money, versus just 34% today.
- The number of viewers who are willing to accept at least some ads now stands at 88%.
- Apple TV+ appears to be readying an ad tier, following the introduction of ad plans from Disney+, Netflix, and Prime Video since 2022.
Hub’s data found that since 2021, the willingness to watch streaming ads among viewers has increased by a good margin. In June 2021, Hub’s numbers show that 42% of audiences would prefer to avoid ads on streaming services, even if it meant spending a little more. That number has dropped to 34% as of June 2024, which makes sense considering ad-free streaming across the industry got 25% more expensive last year alone.
The numbers from Hub also show that the number of customers who are steadfastly against seeing any ads whatsoever with their streaming service has dwindled in the same time period. In June 2021, Hub’s data shows that 17% of audiences were unwilling to watch any ads with their streaming service. That number has shrunk to 12% in 2024, while the number of customers who say that content is the most important factor for a streamer has jumped nearly 10 percentage points.
Obviously, cost factors are a big reason that more and more viewers are willing to accept streaming ads. Streaming was never going to remain an ad-free medium permanently, especially as more and more viewers began to think of it as a replacement for linear TV. Streaming still offers freedoms that cable packages don’t provide such as ease of cancellation, but TV isn’t ready to move away from the symbiotic relationship it has with advertisers just yet.
Are Streaming Ads Better Than TV Commercials?
The survey from Hub also took a look at which types of commercials viewers see more favorably. It found that 88% of viewers say they can tell the difference between how much advertising they see on some services versus others at least somewhat accurately, and streaming platforms with ad plans come out ahead of the competition in terms of preferences.
In total, 53% of Hub’s respondents said they thought ad-supported video-on-demand (AVOD) plans handled ads and promotions a little or a lot better than competing services. No other type of service included in Hub’s survey saw more than 50% of participants say it handled ads better. Cable got the worst results of all; only 25% of Hub respondents said multi-channel video programming distributors (MVPDs) like cable and satellite companies handled ads better than the competition.
Streamers have to be careful to keep ad loads at a tolerable level going forward. Hub’s data shows that customers are considerably more likely to say they had a good viewing experience with a streaming platform that offers reasonable ad break lengths with an acceptable number of commercials each. Most streaming services offer less than half the amount of ads that viewers see during linear TV shows, and it would be best for streamers to keep it that way, according to Hub.
Hub’s data also shows how big of a shift the introduction of an ad-supported plan for Amazon’s Prime Video was when the tier rolled out in January. Prime Video followed Netflix and Disney+ as major streamers that have launched ad plans since 2022, and Hub’s numbers show that its ad plan launch caused the number of customers who said they used at least one ad-free service to plummet from 84% to 58%. That shows how many households are using Prime Video, and once again demonstrates the shrewdness of Amazon’s decision to simply place ads on its existing tier instead of launching a cheaper ad plan for customers to pick.
Finally, Hub’s numbers have important lessons for a streamer like Apple TV+, which appears to be drawing closer to launching an ad-supported plan for the first time. Apple TV+ must do a good job of letting people know about its ad tier when it launches, as Hub’s data found that 30% or more of audiences are not sure if top services like Peacock, Max, Disney+ and Paramount+ even have ad plans to choose from.
“Over the past few years, the video ecosystem has seen fundamental change, with nearly all of the formerly ad-free streamers adding a lower cost ad-supported tier,” said Mark Loughney, Hub Senior Consultant. “Consumers have responded not by rejecting advertising or canceling subscriptions, but embracing the opportunity to save on their monthly subscriptions. By putting forth an overt offer of lower fees in exchange for watching a reasonable number of ads, the streaming services have given consumers a better value proposition. As a result, the future of the streaming advertising marketplace looks very bright.”
Amazon Prime Video
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