American consumers will accept ads on streaming if it saves cash

Commercial breaks on streaming services are apparently not that annoying to American consumers, with new research showing that users are increasingly opting for ads in exchange for savings on their subscription costs.

The adverts we were more than happy to escape by subscribing to one or another streaming platform have made a comeback in 2023. Most streamers have now introduced ad-based tiers.

Naturally, it annoyed many at first. However, millions of consumers were soon rushing to switch to plans with ads – mostly because they’re simply a lot cheaper than the ad-free ones. Besides, the ad experience in streaming is different than in cable – it’s usually just 4-5 minutes of ads per hour of content.

Now, new findings from Hub Entertainment Research show that American consumers have actually warmed up to the idea of ads on streaming platforms.

Hub’s annual 2023 report “TV Advertising: Fact vs. Fiction” found that of 3,000 surveyed U.S. consumers between 14-74, the majority are softening their stance on cheaper, ad-supported streaming options to keep their monthly streaming bills under control.

Approximately two-thirds of respondents said that they would choose an ad-supported plan if it could hit the sweet spot of $4 to $5 in savings per month.

In June 2022, consumers hit a peak of anti-ad fervor, with 44% of respondents stating that they would pay $4 to $5 more per month for a streaming service if it meant no ad time. But by December 2023, that figure fell to 36%.

What’s more, this past December was also the survey peak of consumers reporting that the bottom line of their monthly bills was more important than an ad-free experience. 64% of respondents said that they’d rather save that same $4 to $5 per subscription per month by watching ads.

Consumers are quite specific in what they’re ready to tolerate – they resoundingly prefer short, sweet ads, and they’ll even pay more attention to them.

Around 38% of consumers reported they would choose one streaming service over another if it offered a lighter ad load, with the threshold of acceptable ad break length clocking in at under 60 seconds. Once an ad break tips over the 90-second mark, consumer approval plummets.

“Our study has consistently shown that viewers are open to and tolerant of advertising – especially when ad loads are reasonable, when users’ bills are lower, and when they have the option to choose a premium ad-free plan if they so desire,” Hub Entertainment Research said.

“Time and again, we see consumers choosing content first – whether or not they can watch it ad-free.”

This changing consumer sentiment around ads could mean good news for Amazon Prime Video, another streamer slated to launch ads by the end of January. Ads will be introduced to all users, and subscribers seeking to keep content ad-free will have to pay $2.99 more per month.

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