- The majority of consumers who join for an ad-supported streaming plan are first-time subscribers, somewhat than pre-existing users downgrading their plans, according to new research from Samba TV and HarrisX shared with Marketing Dive.
- A March survey found that 11% of Netflix users and 19% of Disney+ users have ad-supported tiers. Only 15% of those subscribers downgraded from a dearer subscription, while the remaining 85% are new signups.
- The findings display strong interest in ad-supported streaming, with 60% of consumers saying they might consider subscribing to a reduced service if it meant watching ads. They also show the channel’s potential to deliver incremental reach for advertisers.
As the streaming market continues to evolve, the strategy of introducing an ad-supported tier seems to be paying off for a lot of providers. Both Netflix and Disney+ have seen an uptick in new subscribers — not only those that downgrade from one other tier — a significant marker of ad-supported success. However, ad-supported streaming from major providers resembling Netflix and Disney+ continues to be in its infancy, and consumer preferences around costs, the quantity of ads and ad-placement has yet to be fully understood.
The survey, which was conducted by HarrisX, analyzed results from 2,506 adults collected online between March 23 to March 27. Results were weighted by a wide range of aspects including race, income and mobile carrier.
The findings could spell trouble for linear TV, which is facing ad revenue challenges on quite a few fronts.
“With more audiences flocking to ad-supported options and billions of impressions available on daily basis, promoting dollars are primed to flow into new offerings that may prove incrementality with an equally devastating spiral for linear services which might be saturating audiences with redundant, high frequency ad exposure,” said Ashwin Navin, co-founder and CEO of Samba TV in a press release.
The findings also showcase consumer preferences around ads in streaming content. Forty-two percent would favor for ads to appear initially of a program, 19% would favor to see them towards the center, 16% at the top and 23% would favor a combination of all three. The majority, around half, can be positive with seeing two or three ads while watching but only 6% are okay with 4 or more advertisements.
However, 22% of consumers say these advertisements are highly disruptive, with 18% saying they’re minimally disruptive. The survey found that men (25%), Gen Z (28%) and millennials (33%) were more likely to find ads highly disruptive. Additionally, 48% of consumers with ad-supported services saw repetitive ads, with women more likely to see repetitive ads.
Most subscribers would keep their subscriptions even when there was a price increase, per the research. Somewhat over half for each, 52% for Disney+ and 55% for Netflix subscribers, would keep their subscriptions. Only 16% and 12% would cancel outright, while 18% and 19% would switch to a less expensive tier with ads, respectively.
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