Consumers With More SVOD Subscriptions Are More Tolerant of Advertising

Consumers who are subscribed to multiple subscription video on-demand (SVOD) services are more tolerant of advertising, according to research from Ampere Analysis. The findings, in some ways counter-intuitive, might be welcome news for the advertising industry, suggesting that as SVOD services proliferate, ad-supported video on-demand (AVOD) services could become more appealing to customers.

In a survey of 20 markets, as part of Ampere’s Q1 2019 consumer tracking study, respondents were asked if they agreed with the statement “I don’t mind seeing advertising when I watch TV”. On average across markets, 29 percent of consumers who were signed up to just one SVOD service said they agreed with the statement. But this rose to 36 percent for consumers with three SVOD subscriptions, and rose again to 48 percent for those with five or more subscriptions.

This rise was more significant in some markets than others. In Brazil for example, only 31 percent of consumers with one SVOD subscription said they don’t mind seeing advertising on TV, as opposed to 60 percent of those with five or more subscriptions.

The findings may at first seem counter-intuitive for a couple of reasons. Consumers who have signed up to multiple SVOD services might be expected to have done so specifically to avoid advertising, preferring paid and ad-free SVOD services over ad-supported alternatives. But Ampere says the correlation is likely due at least in part to the fact that consumers with multiple subscriptions are likely to be younger, and younger audiences are on average more tolerant of advertising. So many of those with multiple subscriptions aren’t cord-cutters who’ve moved away from ad-supported TV, but cord-nevers who might actually be quite tolerant of ads.

But the data also runs contrary to the idea that consumers have become too used to the likes of Netflix and Amazon Prime Video providing ad-free viewing, and are starting to find TV advertising intolerable as a result. While consumers may prefer ad-free viewing, Ampere suggests the proliferation of SVOD services is making it more expensive for consumers to pay for every streaming service they’d like to, and that this is making them more willing to watch ads as a trade-off for cheaper or free content.

As VAN has previously reported, consumers are increasingly “OTT-stacking” – creating their own bundles of over-the-top (OTT) services, often as an alternative to pay TV. The good news for the AVOD and hybrid model, as well as the advertising industry as a whole, is that this data suggests ad-supported services will be welcome in these bundles.

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