The streaming wars continue to remain a hot topic in the ad world, and the release of two recent studies on subscriber behaviors and mindsets were jam packed with interesting tidbits. For instance:
- According to a Reelgood study, legacy streaming platforms (Netflix, Hulu, and Prime Video) still aren’t losing subscriber ground to the newest kids on the block (HBO Max, Peacock, Apple TV+, Disney +, etc.). A majority of subscribers to those newer services (90% in some cases) are adding them on top of existing legacy streaming accounts. Their study also found that just 3% – 35% of Netflix, Hulu, or Prime Video subscribers added HBO Max, Apple TV+, or Peacock subscriptions on top of their existing accounts.
- Data from Alphonso backs up this streaming pecking order, but takes it a step further by showcasing that just 7% of respondents plan to remove Netflix from their streaming mix in the next year, compared to around 27% who say they’ll remove HBO Max or Apple TV+. Their study also found that most streaming services are chosen because of their large libraries of movies and shows (with original shows not seen as a primary motivator), and that a majority of streaming subscribers (69%) will trade lower fees for ad-supported content, while just 7% will pay more for fewer ads. Alphonso data also found that increased OTT viewing of original programming seen during the height of the pandemic (March and April), has now dropped back down to pre-COVID levels.
- First-to-market leaders in the streaming landscape like Netflix, Hulu, and Prime Video will be hard to knock off their thrones. But they’re not invincible. Content rights battles will be heating up over the coming years as legacy agreements expire or are renegotiated, and library shuffles will cause some consumers to think twice about their account mix. Also worth mentioning—the newest streaming services like Peacock, Disney +, and HBO Max just launched this year, so they’ll need some time to prove their value and win loyalty from viewers.
- Based upon the Alphonso data, it appears that consumers are still fine with ad-supported content in exchange for lower-cost subscriptions (or no subscription cost at all). This data is backed by Hulu’s announcement last year that about 70% of its subscribers are on its ad-supported Basic plan, showing a clear tolerance among its user base. But Alphoso’s data also reveals that sentiments around ad load are split even at the moment. Half of respondents are fine with the volume of ads, while the other half feel there are too many. Recent trends that have seen an increasing amount of ad dollars spent on OTT inventory (when compared to past years) could be playing a part in this perception and reaction. But if history is any indicator, as streaming usage continues to grow (along with ad spend) we expect to see ad tolerance trend back up as well, as long as the price and content are right.
- The increase in viewership of original programming across OTT platforms noted by Alphonso is backed by overall OTT viewership bumps seen in studies by Nielsen and Comscore. Alphonso’s data however is particularly interesting because it zooms in on original programming. Besides the overall OTT bump seen during the height of the pandemic, consumption of original programming was likely also on the rise as new subscribers trialed content across multiple streaming services before deciding on favorites. Now, however, the latest months are showing a slight reversal in overall streaming consumption levels. While YOY streaming consumption is still up, viewing trended down 49% from May to June. This decrease is likely a byproduct of stay-at-home measures and business closures being eased, along with the arrival of summer “vacations.” But regardless of these ebbs and flows, it’s also key for advertisers to keep in mind that this YOY net increase in streaming consumption doesn’t necessarily translate to an increase in ad inventory opportunities, since it’s unclear how much share is going to SVOD (Neflix, Prime Video, Hulu Premium, Disney +, Peacock Premium, Apple TV+, etc.) vs. AVOD (Hulu Basic, CBS All Acccess, Peacock, YouTube, etc.) platforms.