December 16, 2020
Who says people don’t like ads with their video? The growth of ad-supported VOD and ad-based SVOD continues among consumers. New data from Parks Associates finds 20% of U.S. broadband households currently use an over-the-top video service with ads, and 15% use a “freemium” service, placing these offerings in a strong second place, among streaming video business models.
“There is no clear market leader in the ad-supported and freemium OTT space, with Pluto TV, The Roku Channel, Tubi TV, Peacock and Crackle all scoring relatively similar adoption rates,” Steve Nason with Parks Associates said in a statement. “The newest offering, NBCUniversal’s Peacock, does have the reach, content and profile to disrupt this area, which could further boost usage of ad-based and freemium OTT among U.S. households.”
Parks finds domestic broadband households in Q1 2020 reported spending an average of $16 per month on OTT video service subscriptions, behind $89 per month on pay-TV services. Consumer spending has been shifting toward OTT services and subscriptions as more households cut or trim their pay-TV services.
“A prolonged economic contraction could drive households to reduce pay-TV spending more, while also scrutinizing their OTT service stacks,” Nason said. “Ad-based services will establish a large role within the today’s OTT service space as consumers look for affordable entertainment options.”