Nielsen’s data shows that streaming as a whole has grown significantly as a whole over the last year. Streaming now accounts for 25 percent of total time spent watching TV, up from 16 percent last year.
But out of this growth, Nielsen says that time spent watching ad-supported streaming services is outpacing time spent with the big name SVOD services.
Most of this growth is coming from ad-supported services Hulu and YouTube. Both of these are counted as part of the ‘big five’ services by Nielsen (Netflix, YouTube, Hulu, Amazon and Disney+). These ‘big five’ services as a whole grew from 60.3 billion total minutes streamed in Q2 2019 to 108.7 billion minutes in Q2 this year.
But smaller ad-supported streaming services are also seeing a significant rise in viewing. Time spent on streaming services outside of the big five’ grew by over 12 billion minutes over the past year, representing 57 percent year-on-year growth. And the vast majority of these smaller services are ad-supported, with SVOD services representing just 14 percent of this ‘other’ category.
Overall, Nielsen says over 50 percent of American’s are now watching ad-supported video content, compared to just 16 percent prior to the coronavirus pandemic.
SVOD ceilings and COVID constraints
Nielsen says a few factors are driving this growth.
The pandemic has played a large role, driving up time spent with video as a whole, but also putting tighter restraints on audiences budgets. Nielsen says its research shows two types of consumers are shifting towards ad-supported streaming. Firstly there are ‘constrained spenders’, whose entertainment budgets have been cut due to job losses or wage decreases. The second group, ‘insulated spenders’, are shifting to ad-supported streaming as a precautionary measure, rather than because their income has been hit.
But Nielsen also finds that some consumers are starting to bump up against their ‘SVOD ceilings’ – the maximum number of paid services they’re willing to subscribe to. “Newer entrants looking to carve out their own niches in the streaming realm might gain more traction quickly via ad-supported mode,” said Nielsen’s report.