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.”
Streamers have finally reached peak subscriptions, and savvy consumers are taking advantage of “quick churning” or moving in and out of services, according to a Hub Intel study.
In June, Hub surveyed consumers about their maximum number of video platforms. In the survey, 22% said they didn’t have a maximum number in mind, a third (35%) said they had a maximum, but had not reached it yet; and the biggest segment (43%) said they’re at their maximum number right now. All three groups top out at roughly the same number: seven different sources, across all categories (free and paid, cable and streaming, live and on-demand.)
With streaming, there are no barriers to jumping in and out of subscriptions, and consumers are taking advantage, according to the Hub survey. More than 40% said that they’ve signed up for a subscription just to watch one show, and 42% said they have signed up for a new platform, then dropped it within the first six months.
“Quick churning” is especially common among some of the most important viewer segments: younger viewers and high spenders. Almost 60% of viewers under 25 say they have dropped a new subscription soon after signing up. Viewers who spend the most on TV are also more likely to “quick churn.” More than half of those with four or more paid TV subscriptions have dropped a new one soon after signing on.
The most common reason for quick churn? “I ran out of things to watch.”
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“Victory in the streaming wars had been defined by adding the most subscribers — usually via a firehose of flashy original content,” Jon Giegengack, Hub principal and founder, said in a statement. “As we’re seeing viewers max out on subscriptions and content budgets contract, job No. 1 for streamers will be keeping subs engaged after the show they signed up to see is over.”
Streaming marketers have done a good job of driving awareness, with even the newest platforms boast brand awareness of more than 90%, according to a study from Hub Intel.
Still, far fewer consumers feel confident they know what makes one SVOD brand different from the others.
In January 2023, 41% of respondents said in the past year they had signed up for a new streaming service just to watch one show (up from 35% in 2021). It’s an even bigger factor among the most valuable demographics: 57% of those under age 35 have signed up to watch one show and among households with kids it’s 54%.
The most common reason that people drop a streaming platform is that they “ran out of things to watch.” Leveraging the brands of key IP is a powerful way to attract viewers, noted Hub. For example, in January 2023, 29% of respondents said they had watched “Yellowstone.” Of those, 70% said they had gone on to watch one or more of the shows related to “Yellowstone” (direct spinoffs or shows promoted as coming from Taylor Sheridan/the creators of “Yellowstone”). Notably, “Yellowstone” can only be watched on cable or Peacock, while all those other shows require a subscription to Paramount +.
“Content has always been king,” said Jon Giegengack, principal and Hub founder, in a statement. “But as the streaming ecosystem gets more crowded, the role of IP branding on which platforms viewers sign up for and keep is more direct than ever. And at a time when mitigating churn has become job one for providers, valuable IP will be more valuable than ever.”
Netflix is still consumers’ service for their favorite shows among streaming services, but others are catching up, according to Hub Entertainment Research’s annual “Conquering Content” survey.
In 2017, Netflix was the undisputed king of originals. Disney + and HBO Max had not yet launched, and only 11% of viewers said their favorite show was on Amazon or Hulu.
In 2021, Netflix still accounted for more viewing of favorites than any other major streaming platform, but its share had fallen, while that of the other “Big 4” had doubled.
“At the end of the day, Netflix still creates more content than anyone else and many still consider it their most indispensable provider,” Jon Giegengack, Hub founder and principal, said in a statement. “But as competitors create more originals (and networks reserve their best shows for their own streaming platforms), the competition for share of mind will get tighter. And that pressure will show up in metrics like lean-in viewing before it appears in subscriber numbers.”