Premium Subscription Channels Race to the Bottom (Line)
by Isabel Greenfield
6 Min Read
New Studies and Announcements Shine a Light on Surprising Numbers
3 Min Read
After a year of the COVID-19 pandemic, we are starting to get a better understanding of how the event has affected Connected TV adoption and viewing habits. Several new studies and announcements are shining a light on just how bright the future of Connected TV is.
A recent AdWeek-Morning Consult survey tracked viewers’ relationships with streaming services and how they changed during the pandemic. Over 70% of respondents reported that they, or someone in their household, subscribed to at least one streaming service. While that number might not be surprising, especially after a year of both lockdowns and premium content on every platform, respondents’ views on ad-supported platforms might surprise you.
Almost across the board, ad-supported tiers were more popular with viewers. On Hulu, 31% of respondents reported subscribing to the ad-supported option compared to 25% paying for the ad-free tier.
Newer platforms saw similar subscription habits. 10% of respondents reported subscribing to the Paramount+ ad-supported option, compared to 9% that paid for no ads. On Peacock, 17% subscribed to the partial offering supported by ads; only 9% paid for the ad-free Peacock Premium Plus. Other popular ad-supported services included Tubi (21%) and Pluto TV (19%).
It’s obvious that as the breadth of streaming services continues to grow – and with each service offering must-see exclusive content – many subscribers are choosing to keep costs down by opting into less expensive ad-supported tiers. As the battle for market share and views continues to heat up between these competing services, this number will undoubtedly increase as viewers look for a cost-effective way to get access.
As if that wasn’t impressive enough, consider this new study from consumer research firm Leichtman Research Group (LRG): 82% of US households now have at least one internet-connected TV – like a smart TV, stand-alone streaming device (Roku, Chromecast, Amazon Firestick, AppleTV), connected video game system, or connected Blu-ray player. The figure is an increase from 80% in 2020, 74% in 2019, 65% in 2016, and 30% in 2011 – a shocking rate of growth over the last ten years.
To put that in perspective, only 85% of Americans have internet access. In other words, almost every U.S household with internet access has a device that can stream content.
Additional findings from LRG include:
The data speaks for itself. Not only are Americans subscribing to streaming services, but the barrier to entry is also dropping. Almost everyone with an internet connection can stream at least one service in their home, and the upfront costs are decreasing rapidly.
With powerful stats like these, it is no wonder that Connected TV advertising platforms continue to expand – and offer new advertising opportunities for brands. This week Roku announced a branded content studio that will produce short-form TV programs, interactive video ads, and other branded content on their in-house hub, the Roku Channel. This new offering is designed to help brands create marketing experiences that stand out, and is another example of a platform providing a new way for advertisers to connect with audiences.
As streaming services continue to compete in an increasingly crowded and competitive market, we will continue to see more unique ways for brands to connect with viewers.
Thanks to habits formed during COVID, as well as the decrease in technology costs, the adoption of streaming services and connected devices show no signs of slowing down post-pandemic – and that’s great news for both brands and the platforms finding unique ways to advertise. For advertisers embracing Connected TV, the future is limitless.