LG: Majority of Connected-TV Users Prefer Free, Ad-Supported Streaming Video

Nearly 70% of connected TV users prefer free, ad-supported streaming TV (FAST) content instead of a paid subscription without ads, and more than half (53%) spend two or more hours per week using FAST applications, according to new data from LG Ad Solutions.

The LG study, which is based on an online survey of 1,100 CTV owners in the United States, found that while 56% of U.S. CTV users prefer watching content via streaming applications, it takes viewers almost 12 minutes on average to decide what to watch, up from 6 minutes the prior year. In addition, 38% cite too many content choices as their top challenge when looking for content to watch — with 37% stating they can’t remember what platform content is on.

Another 63% of respondents said they are likely to sign up for a streaming subscription service to watch specific content and then cancel/pause their subscription after watching.

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Forty-two percent of respondents said they prefer ads that have interactive features, with 71% of viewers liking TV ad creatives that include a QR code. In addition, 62% are open to scanning a QR code, and 38% are likely to make a purchase after scanning a QR code on a TV ad.

“As content continues to proliferate across channels and platforms, making content more discoverable through strategies like leveraging the [CTV] home screen will be vital to capture consumer eyeballs,” Tony Marlow, CMO at LG Ad Solutions, said in a statement.

Marlow added that 40% of CTV users currently rely on the TV home screen for content recommendations.

“Consumers are now overwhelmingly open to ad-supported streaming content, signaling a seismic shift in their CTV habits,” he said. “It is now a place where people engage with the personalized content and where marketers can connect with those audiences through highly relevant messages.”

Analyst: Netflix Ad-Supported Option Expected to Help Up Q4 Subscriber Growth to 10.4 Million

Netflix added an estimated 10.4 million subscribers globally in the fourth quarter, up from a previous estimate of 9.5 million subs, according to new data estimates from Wells Fargo Securities.

Netflix reports fourth-quarter results on Jan. 23.

Analyst Steve Cahall believes Netflix’s aggressive move to stop people freeloading on existing subscribers through unauthorized password sharing could drive ad-supported subscriber growth of around 4.2 million subs, exceeding estimates of 3.9 million subs through the first quarter, ended March 31.

Netflix, which said about 100 million subscribers globally were sharing their passwords with non-paying users, notified members of the situation, offering unauthorized users the option to share an existing standard account for a $7.99 monthly fee, or get their own account. Premium subs can share up to two accounts, each for the aforementioned fee.

While some freeloaders have opted to share an existing account, the majority have opted for Netflix’s $6.99 ad-supported plan.

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Through the second half of the year, Netflix sub growth is projected to cool to 3.8 million from 7.3 million in the previous-year period, according to Wells Fargo. Total 2024 subscriber growth is projected to be around 19.5 million, which is 2.5 million subs below the analyst’s previous estimate of around 22 million. Wall Street is reportedly projecting 2024 sub growth of around 17.5 million.

Disney+ Launches Ad-Supported Subscription Option in the U.K.

Disney+ Nov. 1 formally launched an ad-supported option in the U.K., priced at £4.99 per month ($6.06), in addition to rolling out two ad-free tiers priced at  £7.99 ($9.70) and £10.99 ($13.34), respectively.

The rollout comes about 11 months after Disney+ bow its inaugural ad-supported option in the U.S. — a month after Netflix’s hasty ad-supported option’s debut. Ad-supported tiers are now the new normal among all subscription streaming services not named Apple TV+, which remains ad-free at $9.99.

“Today’s launch represents a significant milestone for Disney+ in the U.K., offering customers the flexibility to select a plan that suits their needs and budget,” Luke Bradley Jones, GM of Disney+ EMEA, said in a statement.

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BB Media: Discovery+ Features Most Paid Ads Among U.S. Ad-Supported Services

Among U.S. streaming services that employ ad-supported VOD, Discovery+ features the most paid ads.

Paula Stubolini

That’s according to an analysis of the leading streaming services in the United States that use AVOD and ASVOD (ad-supported subscription VOD) revenue models from BB Media analyst Paula Strubolini.

In comparing third-party paid ads with in-house promotional ads on these platforms, Strubolini found Netflix and Pluto TV choose not to use promotional advertising while Max stands out for its self-promotion approach, frequently showcasing its own content in its ads. 

Peacock has a strong advertising presence on five different streaming services, Freevee, Discovery+, Max, Netflix, and its own platform, despite being perceived as competitors. On the other hand, The Walt Disney Co., the parent company of Disney+ and Hulu, promotes its own content, such as the movie Elemental, on six out of the 10 analyzed platforms. In contrast, Paramount+ does not display ads from its competitors on its own platform. 

The most used methods for advertising content are Pre-Roll (ads inserted at the beginning of the content) and Mid-Roll (ads during the content). These strategies have become fundamental pillars of streaming platforms.

“By maintaining a seamless experience, both advertisers and platforms benefit, as less intrusive advertising contributes to increased user retention and engagement,” according to Strubolini.

In 2023, streaming platforms abandoned Post-Roll ads, which were less effective, in favor of ads before or during the content, which increased audience retention, she wrote. They also introduced Pause Ads, which are static images displayed when content is paused, capturing attention without disrupting viewers.

“These strategies provide platforms with effective options for promotion,” according to Stubolini. 

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Only 2% of Netflix and Disney+ subscribers in the United States have opted for the new, more affordable options with advertising. Meanwhile, services such as Hulu, Peacock, and Paramount+, which had already introduced advertising options, have a higher proportion of subscribers on these plans. More than 90% of Hulu subscribers use the ad-supported tier, highlighting a clear difference in subscriber preferences between services that initially offered advertising options and those that added them later, she wrote.

Meanwhile, according to studies conducted by BB Media, 46.2% of people in Latin America prefer a more affordable plan to save money, even if it means having commercial interruptions during the content. Peru and Colombia are the two countries with the highest percentage in favor of the ad-supported option. It’s worth noting that these plans, while more affordable, come with lower-quality features and functions and offer a more limited selection of content.

“In the realm of streaming services, there is an expectation for advancements towards personalized ads, non-intrusive creative formats, reduced ad repetition, interactive advertising, and optimized strategies to maintain a balance between revenue and user experience,” she wrote. “However, there is also a need to put efforts into audience measurement on online platforms to understand and validate the effectiveness of advertising and the revenue it can generate for advertisers. Finally, an expansion into international markets, such as Latin America, is anticipated.”

Hub Research: Consumers Prefer Ad-Supported Tiers If It Saves Them Money

Nearly all TV viewers — 97% — watch ad-supported content, according to a recent survey from Hub Entertainment Research, with six in 10 consumers reporting they would prefer an ad-supported platform if it saved them $4 to $5 over an ad-free service. That also goes for a third of the people who told Hub they cannot tolerate TV ads.

For the first time this year, more viewers expressed a preference for services offering tiered plans over exclusively ad-supported or ad-free streaming, according to the Hub study.

“This appears to be good news for formerly ad-free services like Netflix and Disney+ that have gone to tiered services in the past year,” according to Hub.

The providers with the newest ad-supported services got higher marks from subscribers for their ad experience in the study.

Viewers were more engaged with the advertising when they believed the overall ad loads and break lengths were reasonable.

“When consumers are stacking multiple video subscriptions, advertising provides a real benefit,” Mark Loughney, senior sonsultant, Hub Entertainment Research, said in a statement. “Viewers can choose the price points and levels of ads that appeal to them, while they access their preferred content. However, it is essential that video providers do not take advantage of consumers tolerance for ads. By keeping ad loads and commercial breaks within reasonable levels they can count on wins with both subscribers and advertisers.”

Vizio Adds Local Channel Category, 20 Channels in WatchFree+ Service

Vizio has announced a new local channel category available in its free streaming service WatchFree+, featuring regional news, weather, sports and more.  

With 20 local market news channels from Fox and Gray Television, Vizio smart-TV owners can tune into local news coverage across top designated market areas (DMAs), including Los Angeles, Philadelphia, Dallas-Fort Worth, Atlanta and Washington, D.C. 

The new WatchFree+ channels include:

Fox channels:

  1. WAGA (Fox 5 – Atlanta) – Ch. 945 

  2. WTTG (Fox 5 – Washington DC) – Ch. 946 

  3. WJBK (Fox 2 – Detroit) – Ch. 947

  4. KDFW (Fox 4 – Dallas) – Ch. 948

  5. WTVT (Fox 13 – Tampa Bay) – Ch. 949

  6. KTVU (Fox 2 – San Francisco) – Ch. 950

  7. WTXF (Fox 29 – Philadelphia) – Ch. 951

  8. WOFL (Fox 35 Orlando) – Ch. 952

  9. KCPQ (Fox 13 Seattle) – Ch. 953

  10. KTTV (Fox 11 – Los Angeles) – Ch. 955

 

Gray Television channels:

  1. WANF Atlanta News First (Independent – Atlanta) – Ch. 961

  2. KTVK/KPHO Arizona’s Family (CBS 5 – Phoenix) – Ch. 962

  3. WOIO Cleveland 19 News (CBS 19 – Cleveland/Akron) – Ch. 963

  4. WBTV News (CBS 3 – Charlotte) – Ch. 964

  5. KPTV (FOX 12 – Portland) – Ch. 965

  6. KMOV4 News (CBS 4 – St. Louis) – Ch. 966

  7. WSMV4 News (CBS 4 – Nashville) – Ch. 967

  8. KCTV5 News (CBS 5 – Kansas City) – Ch. 968

  9. WFSB Eyewitness News 3 (CBS 3 – Hartford/New Haven) – Ch. 969

  10. WXIX-TV (FOX19 Now – Cincinnati) – Ch. 970

 
This expansion adds to the three current local news channels on WatchFree+ (CBS News Los Angeles — Ch. 160, CBS News New York — Ch. 161, and News 12 New York — Ch. 162).  

Crunchyroll to Give Fans a Workout at San Diego Comic-Con

Crunchyroll will mount the first-ever “Crunchyroll Ultimate Anime Fitness Challenge,” immersive show floor pieces, panels and anime exhibits at the Comic-Con Museum during San Diego Comic-Con July 20-23.

Crunchyroll is teaming up with Hardcore Fitness in downtown San Diego to create “Crunchyroll’s Ultimate Anime Fitness Challenge.” Crunchyroll subscribers and SDCC badge holders can sign up for non-intensive, light workout sessions at 9 a.m. and 10 a.m. July 21 and July 22 at Hardcore Fitness (1014 Fifth Ave., Suite 120). Fitness writer, influencer and anime fan Charles Thorp (along with Crunchyroll co-hosts Lauren Moore and Tim Lyu)  will take trainees through accessible fitness routines inspired by anime heroes — weight training, self-defense and more. Fans can register at CrunchyrollAnimeFitness.rsvpify.com; space is limited.

Crunchyroll will also be on the San Diego Comic-Con show floor with a booth (#4135) featuring scenes and sounds from hit anime. Comic-Con attendees that long for their own domain expansions may enter “The”Jujutsu Kaisen” Experience,” where they will find themselves immersed in iconic moments. Also at the booth, Crunchyroll is giving out Dragon Ball Super: Super Hero wristbands; “Solo Leveling” and “Demon Slayer: Kimetsu no Yaiba” posters; and art cards for “Jujutsu Kaisen” and “My Hero Academia.”

Crunchyroll is presenting new exhibits and features at the Comic-Con Museum. Beginning July 18 at 10 a.m. PT, a statue depicting the legendary fight between “My Hero Academia’s” All Might and All for One will be on display, and in partnership with Mondo, Crunchyroll will honor “Cowboy Bebop’s” 25th anniversary with an exhibit that features 28 never-before-seen commissioned art pieces. Tickets are available on the Comic-Con Museum Official Website.

A Crunchroll industry panel, with info on the anime coming out of Crunchyroll, will take place July 20 at 3 p.m. PT at the San Diego Convention Center,  Room 6A. The panel is hosted by Crunchyroll’s Lauren Moore and Tim Lyu.

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At the San Diego Convention Center on July 20 at 10 a.m. PT, there will also be a panel, “Amazing! Fantastic! Incredible! News From the Comic-Con Museum,” emceed by Eddie Ibrahim and featuring comic book historian and film producer Michael Uslan; writer, illustrator and writer Colleen Duran; art historian and curator Kim Munson; Stage Nine Exhibits CEO Troy Carlson; the godfather of color book digital coloring Steve Oliff; executive director of the Comic-Con Museum Rita Vandergaw; and GM of Crunchyroll Games and SVP of emerging business Terry Li.

Crunchyroll will be hosting daily recaps on its Twitter, Instagram, TikTok, and YouTube Channel.

Wall Street Applauds Netflix’s Ad-Supported Numbers With Stock Price Surge

Netflix shares jumped nearly 10% in midday trading following the streamer’s first-ever upfronts presentation that claimed nearly 5 million “active users” for its lower-cost ($6.99) “basic with ads” subscription tier.

“We would interpret that 5 million monthly active users as implying 2 million to 3 million subscription accounts,” Mark Mahaney, analyst with Evercore, wrote in a note to clients.

The active average users is the first time Netflix has disclosed actual subscriber data for its newly priced tier launched last November. The streamer was using the data, along with its platform and original content, as a selling point to marketers during its May 17 upfront in New York.

Mahaney believes the ad-supported sub data is incremental to Netflix’s revenue growth, with the new tier not expected to reach around 10% of the streamer’s total revenue until 2025.

“The more important question for us is how incremental the ad-supported subs are likely to be to Netflix’s subscriber growth, and we continue to believe — based on our extensive survey work into Netflix’s user price sensitivity — that these subs are likely to be mostly incremental,” he wrote.

Netflix ended the first quarter with more than 232 million paid subscribers, including 74.4 million subs across North America.

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Netflix Touts New Ad Service With 5M Monthly Users at Upfronts Presentation

Netflix touted its new ad-supported service at the Upfronts in New York May 17.

Jeremi Gorman, president, worldwide advertising, noted “we are building a forever business” and that in the first six months “we worked hard to be brilliant at the basics, focusing on areas advertisers told us matter most — like geo, age, and gender targeting; third-party verification and deploying the right brand suitability mechanisms for [advertisers] to make the best decisions for [their] brand.”

“We treat our ads with the same care we treat our incredible content: serving them locally; seamlessly transitioning between shows and ads with no latency; and implementing industry-leading frequency caps with an ad load of four to five minutes per hour,” he added.

According to Nielsen, Netflix’s “reach at two or more hours is higher than almost everyone else’s reach at a one-minute threshold,” he said.

“Two hours compared to one minute,” he said. “That’s what sets Netflix apart from other streamers. It’s the difference between foundational viewing and simply sampling.” 

He said Netflix prefers to talk about metrics “like monthly active users,” adding that six months after launch, the ad-supported plan has nearly 5 million global monthly active users, with a median age of 34.

“Since early this year, our ads member base has more than doubled,” added co-CEO Greg Peters. “On average, more than a quarter of our signups now choose the ads plan in countries where it’s available. Seventy percent of our ad-supported members are between the ages of 18 and 49.” 

He noted that “engagement on our ads plan is similar to our comparable non-ads plans.” 

Peter Naylor, VP of global advertising sales, announced new product and measurement solutions for Netflix’s ad-supported plan, including the ability for brands “to connect with our audiences during some of the most watched and most relevant cultural moments of the year.” This includes two new sponsorship opportunities to give brands “the opportunity to be within the top streaming content anywhere,” he said.

Advertisers will be able to sponsor the presentation of some of the service’s most popular series on Netflix at launch. These opportunities will be available first in the United States, with other countries to follow. They will also be able to align themselves with collections on Netflix by featuring their campaigns within local holidays (e.g. Valentine’s Day) and key brand moments (e.g. Sustainability Stories).

In addition, brands will be able to run sponsorships at the start of an episode, showcasing their brand before an episode even begins.

Brands can align themselves with Netflix’s top 10, which guarantees brand placement within Netflix’s most popular shows and films, as part of its daily country top 10 series and the top 10 film collections. 

With Nielsen ONE Launch, starting in Q4, brands in the United States will be able to use Nielsen DAR (Digital Ad Ratings), which offers de-duplicated audience measurement metrics for campaigns running on the Netflix ad-supported plan. The tool will enable advertisers to quantify the unique reach of their campaign and deepen their understanding of Netflix’s audience, including by age and gender, according to Netflix.

Netflix has partnered with EDO, a TV outcomes measurement platform used to measure the immediate impact of ads across linear and streaming, which, according to Netflix, found that:

  • Netflix outperforms the streaming and linear averages when it comes to driving engagement; and
  • viewers are over four times more likely to engage with an ad on Netflix, compared to other streamers, and over four and a half times more likely than linear TV. 

 

Closing the Upfront, Ted Sarandos, co-CEO said, “Now you’ve heard a lot from us today, and I think it all boils down to one thing: Netflix is a little bit different. In the past — when consumers had very little choice of where to watch — it didn’t matter so much which network a show or film landed on. They were all very similar. Today, we believe that having a title land on Netflix makes all the difference in the world.”

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He added, “Netflix shows and movies are generating global audiences that are many times bigger than our closest competitors” and “the special relationship that fans have with Netflix programming is shaping culture in powerful and unexpected ways.”

Noting the service’s past revolutionary breakthroughs, Sarandos promised for “similar breakthroughs in advertising” that “can be just as impactful.”

Warner Bros. Discovery Unveils Ad Products for Ad-Supported Max Tier

Warner Bros. Discovery May 17 announced the suite of advertising solutions that will be available on the ad-supported tier of Max, the combined HBO Max and Discovery+ service set to launch on May 23.

The announcement, made during the company’s annual Upfront presentation in New York at The Theater at Madison Square Garden, detailed a variety of advertising capabilities. 

Max “will offer one of the industry’s lightest ad loads,” according to the company. 

Ad products include:

  • Traditional Pre-roll Video — Pre-roll ads (15 seconds) play before selected content begins.
  • Traditional Mid-Roll Video — Mid-roll ads play during content playback during mid-roll ad breaks. They are typically 15-second or 30-second video commercials that run as part of a 30- or 60-second ad pod.
  • Takeovers — Allows an advertiser to be the first ad all users see on the platform for one day, with ownership of the pre-roll and first mid-roll ad in each consumer’s first stream.
  • Brand Block — Brand Block enables one brand to exclusively own every ad moment within a piece of content.
  • InFront — InFront allows brands to sponsor an exclusive ad-free experience for viewers by eliminating all mid-roll advertising. In exchange, viewers will watch ads before content playback begins.
  • Pause Ads — Pause Ads are static ads that render on screen when a customer initiates a pause.
  • Interactive Ads — Users will be served a mid-roll ad where they can interact with the ad. These formats include One-Click Reveal, which reveals a surprise message, promotion, or trivia answer upon scrolling; Carousel, a curated ad experience where brands can showcase multiple products; Extendable, whereby users are able to open up a branded hub on their mobile or connected TV device to interact further with the ad in an immersive fashion; and Locator, which encourages in-store purchases by informing viewers of nearby merchants.

 

“WBD has a proven track record launching two successful streaming platforms and delivering a precise combination of ad products for maximum efficacy. We’ve had a wide array of advertisers across categories align with our premium storytelling to create impactful brand partnerships,” said Jon Steinlauf, chief U.S. advertising sales officer at Warner Bros. Discovery. “Audiences want to get together to watch our programming as the stories unfold so they can be a part of the conversation. The depth and diversity of our stories on Max brings viewers you can’t find anywhere else.”

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“Max provides advertisers with innovative ad products and access to the most premium brands and content in the video industry, while also rewarding our customers with one of the lightest ad loads in streaming, an incredible win-win,” said J.B. Perrette, president and CEO of global streaming and games at Warner Bros. Discovery. “We rely on data and tech, along with a long history of expertise in advertising to serve innovative and non-traditional ads to targeted adult audiences in ways that minimize disruption to storytelling.”

Max with Ads will be available for $9.99 a month or $99.99 per year.