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Video Services: OTT, Pay TV

Use of Ad-Supported Streaming Services Grows

Ad-based video streaming services are among the fastest-growing segments of the video entertainment market, now watched by 37 million internet households. Both AVOD and FAST services offer consumers access to a wide variety of content in a cost-effective way with broad appeal. At the same time, the media environment is fragmented; broadcasters and content owners must optimize audience reach while delivering quality content across an increasing number of distribution platforms. More services are trialing an ad-based tier in a hybrid business model approach.

After only slight growth from 2019 to 2020 (+1%), the share of US Internet households using ad-supported streaming services jumped by six percentage points from 2020 to 2021 as COVID-19 pandemic restrictions took hold and consumers looked for more entertainment options at home. Growth slowed to two percentage points from 2021 to 2022, when 33% of survey respondents used at least one such service, representing just over 37 million US internet households.

According to Parks Associates consumer survey research, Pluto TV, Tubi TV, Peacock, and The Roku Channel comprise the top tier of ad-supported streaming services. Amazon Freevee (still known as IMDb TV when our survey was fielded) leads the group of next-most popular services.

More than half of ad-based service users in Q2 2022 reported using them almost daily, daily, or several times a day. This was a slight increase over Q2 2021, although the percentage of heaviest users (several times a day) fell slightly. Mean, the share of light and moderate users declined from 2021 to 2022. This likely reflects relaxed COVID-19 precautions, allowing people to spend more time away from home rather than watching anything on TV.

This is an excerpt from Parks Associates report Ad-Based OTT: Growth in FAST and AVOD Services. The just published research explores factors driving the growth of ad-based online video, profiles and compares market leaders, and assesses consumer preferences in watching ad-based content. It quantifies the number of households using ad-based online video services and includes a five-year forecast of viewer growth.

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