Subscription Video-on-Demand Services Get High Marks For Their Content

October 22, 2018

Ad-free subscription services are rated more highly for their user experience than pay-TV providers, and also get higher marks for their content quality and variety, according to a survey [pdf] commissioned by the IAB. Not surprisingly, pay-TV providers had the lowest ratings from users when it came to their value, consistent with other research.

The survey asked more than 1,200 adults in the US their views on a variety of video viewing platforms they use, including ad-free subscription services, ad-supported subscription services, online-based cable TV providers and offline providers.

Ad-free services such as Netflix, HBO Go/Now and Amazon Prime appeared to lead in many measures. Fully 91% of their viewers rated them as either excellent or good from a user experience (UX) perspective, with regular (not cable) TV getting the lowest rating (72%) on this measure. Interestingly, pay-TV (77%) was rated similarly to ad-supported subscription services (78%) with both behind online-based cable TV providers such as Sling TV or DirecTV Now.

One of the biggest discrepancies in the ratings related to value. Fully 88% of ad-free subscription service subscribers believe that these services carry either an excellent or good value. By contrast, only 59% of cable/satellite/telco TV viewers feel the same way. Once again, online-based cable TV providers carry a much more favorable outlook from their users, with 84% believing they have a good or excellent value.

Value and UX have traditionally been part of the perceived advantages of subscription services. Many pay-TV viewers would like for their providers to adopt a more Netflix-like user interface, for example, while cost has long been a major concern about pay-TV.

Indeed, cost is the primary reason why subscription video-on-demand (SVOD) viewers cut the cord, according to this latest research from the IAB. But there’s a secondary factor that could prove to be even more important in the long run: the quality of the content itself. In fact, MarketingCharts’ State of Traditional TV Viewing report found signs that subscription video-on-demand services are beginning to beat out traditional TV in content perception, an important point given indications that video viewers are displaying a tendency to favor content over medium.

This latest research supports SVOD’s ascendancy in the content wars. Fully 87% of of ad-free subscription service viewers rated the variety of content on these platforms as good or excellent, compared with 76% of pay-TV viewers and 71% of regular (not cable) TV viewers.

Moreover, 87% of ad-free subscription service viewers rated the availability of unique content as good or excellent, compared to just 68% of regular TV viewers and 66% of pay-TV viewers.

Finally, almost 9 in 10 (89%) ad-free subscription service viewers rated the overall content quality of these platforms as good or excellent, versus 76% of pay-TV viewers concerning that platform and 73% of regular (not cable) TV viewers.

What’s interesting to note is that in each of the above cases, online-based cable TV providers such as Sling TV and DirecTV Now exceeded their offline pay-TV counterparts in value and content perception. These online providers – which have been gaining many subscribers of late – are mostly on par with ad-supported subscription services (e.g. Hulu with limited ads) in terms of their content and value ratings. This suggests that these platforms are perceived quite similarly.

They’re also strong vehicles for advertising, per the report – or at least ad-supported subscriptions services are. These services, which retain an attractive audience that’s younger, more diverse and higher-income than TV-only viewers, appear to have gained some receptivity to ads from their viewers. Half say that ads can be useful or enjoyable, and most don’t mind seeing ads if they’re getting to watch content when they want. Most of these viewers also, feel that the commercials on ad-supported subscription services are as good as – if not better – than the ads on regular TV.

The full report is accessible as a PDF here.

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