TV viewers defy conventional wisdom on ad avoidance
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Joseph O'Halloran
| 27 June 2021
Noting that up until recently, the narrative around ad-supported TV services was that the popularity of streaming coupled with steady pay-TV losses seemed suggest services with ads could one day be a thing of the past, a study from Hub Entertainment Research has found a much more nuanced market.
Hub ads study 27 June 2021
In its TV Advertising: Fact Vs. Fiction study, conducted in June 2021 among 3,000 US consumers age 14-74 who watched at least 1 hour of TV per week, Hub found that the world is not divided into those who sometimes watch ads versus those who never watch ads and that the vast majority of viewers watch TV from both ad-supported and ad-free sources.

The study found nearly all TV consumers (95%) watch from at least one ad-supported source with a majority (79%) also watching from at least one ad-free TV source, although the proportion is actually lower than the proportion using a source with ads.

Yet when asked about how they felt about ads during TV shows, nearly a fifth will say that they cannot tolerate them. Specifically, 17% said, unequivocally, that they would “never consider signing up for a TV service that has ads, no matter how much I like the shows”, while a quarter of the survey agreed with the other extreme of “if I’m really interested in a show, it doesn’t matter to me if there are ads.” Neary three-fifths fell between the two statements saying: “I can tolerate a certain number of ads, but if there are too many I’ll go elsewhere.”

However, when Hub introduced the concept of payment in questions, it said that most consumers were willing to trade-off whatever ad resistance they have for the opportunity to save money. Given the choice between a lower-cost ad-supported service and a higher-cost ad-free service—assuming the same content—most would choose the former and 58% said they’d prefer an ad-supported service that costs $4-$5 less per month than an ad-free service, compared with 42% who would rather pay more to avoid ads.

The proportion who would choose a less expensive, ad-supported service over an ad-free services actually includes a third of those who initially said that, on principal, they’d “never consider” a TV service with ads. Among consumers who say they can’t tolerate ads, 30% would choose to watch ads if it means saving $4-$5 per month compared with a more expensive, ad-free service. Those who said they could not tolerate ads were actually a bit more likely to use free, ad supported services (57%) than those who say they’re more open to ads.

When current Netflix subscribers were presented with the hypothetical option of an ad-supported version of the service for $5 less than the ad-free version, nearly half said they’d switch. Almost half (46%) of current subscribers said they’d opt for the ad-supported service for $5 less. When Netflix subscribers are asked about a tier of the service with both pre-roll and mid-roll ads for $5 less, 39% say they’d switch, 7 points lower than the proportion who would switch with pre-roll ads only.

Hub asked those who recently watched a show on an ad-supported service how reasonable the number of ads was. Among those reporting that the show had 5 or fewer ads per 30 minutes, 47% felt the number of ads was reasonable. Among those who estimated 11 or more ads, only 27% felt the number was reasonable—and half considered it unreasonable. Just over a third (35%) of those estimating 5 or fewer ads per 30 minutes said they paid attention to all or most of the ads. This compared with just 23% of those estimating 11 or more ads.

“What’s clear from these findings is that what matters to consumers is not whether ads are included in the content they watch, but how ads are delivered,” said Mark Loughney, Hub senior consultant and co-author of the TV Advertising: Fact Vs. Fiction study. “Even consumers who say they’re categorically opposed to ads will use an ad-supported platform if the price and ad delivery are right.”