Use of Ad-Supported Streaming Services Grows

by Elizabeth Parks | Oct. 24, 2022

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.

 


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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.

 

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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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