Ad-Supported SVOD Services Gain Steam

January 31, 2020

This article is included in these additional categories:

Advertising Trends | Creative & Formats | Digital | Pay-TV & Cord-Cutting | Television | TV Audiences & Consumption | Video

TiVo AVOD Adoption Growth Jan2020More and more households are subscribing to SVOD services, and while that may signal less opportunity for video advertisers given some of those services’ lack of ads, the opposite may in fact be true. Indeed, a recent report [download page] from TiVo indicates that ad-supported video-on-demand services are growing in popularity.

YouTube, the most popular of all the ad-supported services available, saw its usage grow by about 26% year-over-year (y-o-y) to reach 73.1% in Q4 2019, per the report, which surveyed
more than 6,000 adults in the US and Canada.

Meanwhile, viewers are also turning to Facebook (62.3% in Q4 2019, up from 43.9% at the end of 2018) and free video from network sites or apps (45.3% and 13.4%, respectively) at greater rates, with Snapchat also gaining viewers (29.3% and 18.1%, respectively).

This comes as recent research from The Trade Desk indicates that 1 in 3 consumers say they prefer to watch a free service funded by advertising or pay a reduced price for subscriptions that include some ads.

TiVo also found that when viewers were choosing their preferred service bundles, each of the top 11 bundles included an AVOD service. The top bundle, chosen by 38% of respondents, includes Facebook, YouTube and pay-TV. Other popular bundles include Facebook, Netflix and YouTube (29%) and free video from network sites/apps, Facebook and YouTube (29%).

Even though increased usage of AVOD services indicates that consumers are open to having some advertising as part of their video streaming experience, advertisers are still negotiating obstacles that have hindered more widespread adoption of OTT advertising, with measurement being one such challenge.

Other Highlights

  • OTT is catching up to live TV in viewing time: 56% of OTT viewers say they watch at least one hour of OTT per week, compared to 57% of live TV viewers.
  • Viewers like a good laugh: comedy is the most popular content genre for both TV (59.2%) and movies (57.9%).
  • Price is still the primary reason for cutting the cord: as past research has shown, the cost of pay-TV is the reason 69.6% of respondents have cut the cord.
  • There can be too much content: of the one-third of respondents who say they are not interested in choosing the individual channels they want to watch, 31% say there are too many channels to choose from.

The full report can be downloaded here.

About the Data: Findings are based on a Q4 2019 survey of 6,145 adults from the US and Canada.

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