Consumers are witnessing a significant shift in their attitudes towards ads on streaming platforms. In 2023, only 13% disapproved of this format, a sharp decline from 36% in 2022. This change is attributed to the increased prevalence of ads on platforms like Amazon Prime Video and Netflix.
Future Projections for Ad-Supported Video-on-Demand
Our October 2024 forecast indicates that 74.8% of US OTT video service users will watch ad-supported video-on-demand (AVOD) in 2025. This is a substantial increase from 47.3% in 2020, highlighting the growing acceptance of this model. When Amazon Prime Video defaulted its users into the ad-supported tier at the beginning of 2024, ads became an integral part of the streaming experience for 80.0% of its US users who did not choose to pay more for ad-free content.The Impact on Viewers
While the introduction of ad-supported tiers may initially irritate some viewers, many are willing to accept it as a means to save money. Consumers are focused on financial prudence and find that embracing ads on streaming platforms allows them to enjoy entertainment without sacrificing their budgets. For instance, a Hub Research survey in June 2024 showed that only 58% of respondents used ad-free TV services, a significant drop from 84% the previous year. Amazon Prime Video, which was once the go-to ad-free service for many households, saw a major decline in ad-free platform usage after introducing ads in 2024.The Shift in Consumer Behavior
As consumers embrace ad-supported video, they are gradually ditching ad-free options. This shift in behavior is driven by the need to manage expenses while still enjoying their favorite shows and movies. Streaming platforms have recognized this trend and are capitalizing on it by offering ad-supported tiers as an alternative. This not only provides consumers with more choices but also allows platforms to generate revenue through advertising.The Future of Streaming Advertising
The increasing acceptance of ads on streaming platforms is likely to shape the future of streaming advertising. Advertisers are seeing the potential of these platforms to reach a large and engaged audience. As a result, we can expect to see more targeted and personalized advertising on streaming services. This will benefit both advertisers and consumers, as advertisers can reach their desired audiences more effectively, and consumers can enjoy a more customized streaming experience.