A majority of survey respondents (59%) are not willing to pay more than $20 a month for over-the-top video services, according to new data from more than 2,600 U.S. consumers by The Trade Desk. Another 75% of consumers will not pay more than $30 a month.
The online survey was conducted by YouGov from Nov. 19-21, 2019, with a total sample size of 2,613 adults in the U.S.
As more TV content providers launch streaming services in 2020, the results highlight the subscription fatigue threshold for TV streaming services, where on-demand movies, TV shows and live events can be accessed by connected devices such as smart TVs and mobile devices.
“With consumers experiencing subscription fatigue and unwilling to subscribe to more than one or two premium services, broadcasters have to figure out how to continue to fund this new golden age of TV,” Brian Stempeck, chief strategy officer of The Trade Desk, said in a statement.
More than half of U.S. households (53%) subscribe to Netflix, followed by Amazon Prime Video (43%) and Disney-owned Hulu (29%).
In addition, with some media companies pushing ad-supported VOD, the survey found the leading cause of frustration with ads is having to watch the same commercial repeatedly (cited by 46% of respondents).
More than half (53%) of U.S. consumers would be open to watching ads (every other episode of their favorite show) if it meant lowering the cost of subscription streaming services.
More than two-thirds (68%) of U.S. consumers (with no preference to tailored TV ads) would be willing to watch ads relevant to their interests if it meant watching fewer ads overall.
More than half (51%) of respondents who watch new episodes of their streaming TV show on an app, after it premieres, watch on a smart TV.
As more U.S. consumers watch TV content via streaming services, content providers are under pressure to produce new premium content that drives membership and viewership. This research suggests, however, that there are hard limits to consumer appetite for subscription-based services.
The survey indicates a willingness from consumers for streaming services supported by ads, particularly if the format and pacing of commercial breaks differ from traditional TV content.
More than half (53%) of respondents are willing to watch ads every other episode to lower their monthly costs on a device that doesn’t show any ads. Forty percent of consumers would prefer ads tailored to their interests and preferences, but, among those who said they wouldn’t, that number increases to more than two-thirds (68%) if it meant they would see fewer ads.
Despite the mobile nature of streaming apps, consumers have shown they still prefer to view content on the largest screen in their home – the television. More than half (51%) of those consumers who watch new episodes of their favorite shows on an app after it premieres watch a TV show on their connected televisions, rather than a mobile device or on their personal computer.
“This [research] indicates that ads will fund the future of streaming TV, and that broadcasters and advertisers have an opportunity to improve the advertising experience in a way that simply is not possible with traditional, linear TV,” Stempeck said.