Advertising maintains importance to streaming ecosystem
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Editor
| 02 August 2023
Busting what the analyst says is the myth that TV viewers strongly dislike advertising and will go out of their way to avoid them, a Hub Entertainment Research study has revealed how ads play a valuable role for consumers wanting choice and control over subscriptions.
HUb ad free 2 2 Aug2023
The TV Advertising: Fact vs. Fiction study was based on a survey conducted among 3,063 US consumers age 14-74, who watch at least 1 hour of TV per week. Interviews were conducted in May 2023. It explored consumers’ attitudes toward advertising, how it differs across video platforms, and how ad strategy affects viewer engagement.

Fundamentally, the study found that nearly all consumers watch ad-supported TV; more than those that watch ad-free. Virtually all TV viewers consumed ad-supported content, and almost six in ten expressed a preference for ad-supported subscriptions if it meant a lower monthly fee.

Indeed, very few TV viewers were intolerant of advertising and even viewers who were intolerant of advertising would watch ads under the right conditions. Hub noted that consistently, the proportion of viewers who say they cannot tolerate ads on TV is quite small compared to those who say ads are an acceptable aspect of viewing content.

When given a choice between paying a premium to avoid ads or accepting advertising to save $4-5 per month on a subscription, most consumers opted for ads. Even a third of those who say they cannot tolerate them will accept ads if it means a lower cost subscription.

Given the current dynamics of the video industry with growing demand for ad-supported tiers in services, Hub’s research confirmed trends, finding the proportion of viewers who cite a preference for choosing their subscription tier is growing. Nearly four in ten would like providers to offer them a choice between a premium ad-free experience, and a lower-cost option with ads. Services that offer such options can appeal to all consumer segments.

In addition, the streaming services newest to the ad-supported game were giving their viewers a better ad experience. Max, Disney+ and Netflix in particular are rated more positively than other competitors. Consumers have not reacted negatively to the introduction of ads in these formerly ad-free services.

Importantly, when viewers received what they consider a reasonable amount of advertising in content, they pay more attention. This went for the overall number of ads, as well as the length of the breaks. In an environment in which consumers were availing themselves of a multitude of viewing sources, ad-supported subscriptions are filling an important role.

Subscribers wanted the ability to choose how much they spend on subscriptions, and how much advertising they will watch in exchange. Providing both ad-supported and ad-free tiers is an obvious way for streamers to deliver value to their customers Hub concluded.

“Consumers don’t just tolerate advertising in video content, in most cases they actually see benefits from it,” said Mark Loughney, senior consultant to Hub. “It allows them to choose their preferred video tiers at lower cost, and when presented right, advertising results in a more engaging viewing experience.”