About half of US adults would not consider paying a lower monthly fee for streaming video services in exchange for seeing more advertisements. The question of whether ads could become a more common feature in streaming service models raises a conflict among consumers: Is their priority cost, or a low-friction experience? Recent research from YouGov reveals some discrepancies among age groups.
Consumers overall are split on whether they are willing to pay less for streaming services in exchange for seeing ads. However, younger consumers are more apt to consider this option. Indeed, adults ages 25-34 were more likely to consider paying less in exchange for ads (52%) than to not (37%). Respondents 18-24-years-old (44% vs. 40%) and 35-44-years-old (48% vs. 41%) were also somewhat more likely than not to consider seeing more ads in exchange for lower fees.
By contrast, consumers ages 55 and older are decidedly resistant, with 58% saying that they would not consider this lower-fee service, double the share (28%) saying they would.
The response from this oldest group of consumers, an age-group with potentially more money to spend, is a good indicator of streaming service users who prioritize a low-friction experience over cutting costs. Previous YouGov data has found that two-fifths of US adults are willing to spend between $10-$20 on their entertainment subscriptions, with about one-fifth (22%) willing to spend up to $40. Even taking into account those who subscribe to multiple streaming services, this same study shows that a significant portion of consumers shows comfort paying for an ad-free entertainment experience.
Whether or not they would consider the option, this latest study found that consumers consider more ads to be a fair exchange for free or cheaper content. Nearly 3 in 5 (58%) of US adults agree with this statement, including 60% of Netflix customers. This is despite other research showing that about half of Netflix users would be unlikely to switch to a lower-priced, ad-supported tier if they were given the option.
Disney+ is the latest streaming service to enter the running in what YouGov is calling the ‘Great Streaming Wars of 2020’ and is already becoming indispensable to younger audiences. Like its biggest competitor Netflix, which accounted for 31% share of streamers’ viewing time in Q4 2019, Disney+ is currently committed to an ad-free model.
If streaming services drift away from their commitment to being ad-free, it will be received varyingly by consumers with differing priorities – a tiered system which gives consumers a choice between financially accessible content and low-friction entertainment should reinforce these services’ already strong position alongside traditional TV.
Read the full report here.
About the Data: Findings are based on a January 2020 survey of 7,900 US adults.