According to Deloitte’s Digital media trends survey, 47% of American consumers are watching at least one free ad-supported streaming video service, such as Pluto TV, Tubi, and the Roku Channel (18% growth since the pandemic began). Sixty-five percent of respondents to Deloitte’s Digital media trends survey say they’re comfortable watching ads to eliminate or reduce subscription costs and that, given a choice, they prefer ad-supported options for watching streaming video services. In addition, 37% say they appreciate the broad range of shows and movies available on free services.
It can help streaming video services appeal to a wide range of viewers. Free ad-supported video appeals to thrifty baby boomers and matures, who prefer free streaming options by 58% and 65%, respectively, over subscription-based options. Free or discounted AVOD services may also appeal to women, who are facing more financial hardship than men during the COVID-19 pandemic.Ad-supported tiers can help fund pricey content. Given the escalating cost of producing original TV series (up to $25 million per episode) and exclusive streaming rights for sports leagues, streaming services may need to combine subscriptions and ads for “ultra-premium” content to make the numbers work.It can deliver better data points for targeting consumers. Ad experts and Wall Street analysts believe that the industry is in the middle of a strategic shift from linear to streaming buys.
Increasingly, customer retention will depend upon having a single platform capable of satisfying a wide range of entertainment desires. So, rather than focusing solely on streaming video, providers should explore potentially adding games, music, and podcasts to their suite of offerings or partnering with other providers Since the COVID-19 pandemic began, 48% of US consumers have participated in some form of video gaming activity. In addition, 29% of US consumers say they are more likely to use their free time to play a video game than to watch a video. In 2020, the global video game market was expected to reach $159 billion.
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