Amazon is the latest streaming service to announce the introduction of advertising to its platform. However, Amazon have taken a different approach to its rivals Disney+ and Netflix, who offer a cheaper service to those who choose to be served adverts. Those looking to go ad-free will need to pay to upgrade their account. To access ad-free Amazon, viewers will need to pay an additional £2.99 to the standard £8.99 monthly fee. It’s a slightly different approach but the fundamentals remain the same, streaming services apparently need more than just subscription revenue if they are to continue to offer quality programming.
When streaming services launched, the huge appeal was being able to watch what you wanted, when you wanted, without your viewing being interrupted by ads. However, it’s widely known that whilst these platforms are continually investing in content, they are struggling to turn a profit.
For the industry, these developments seem “win-win”. The service provider gets an additional income stream and advertisers get access to new audiences who are perhaps difficult to reach via linear TV. With 83% of consumers watching streaming content for up to two hours a day and as more viewers shift their viewing habits to connected TV (CTV) content, there is a large and lucrative market potentially available. Advertisers now have the opportunity to engage new audiences across CTV and other devices.
What do viewers think?
The impact of the cost of living crisis on viewing habits is clear, 48%* of streaming service cancellations cited cost as the primary reason for unsubscribing. Whilst people love to complain about ads, research reveals viewers are generally pro-advert if it means they can save money. 63%* of British adults will happily accept ads if it means they can access content for free. 41%* are prepared to watch commercials in exchange for a reduced price service.
However, this acceptance of advertising comes with a caveat. Hours and hours of ad free television have left viewers more discerning than ever. Unsurprisingly, 68%* want fewer adverts and 56%* want shorter ad breaks.
How can non-traditional TV providers strike a balance?
Streaming services clearly want to make extra revenue, advertisers want to reach new customers but how do they do that successfully without alienating the all important viewer? The key to success and limiting subscription cancellations will be to ensure the ads being served are relevant to the audience at the same time as not being intrusive. Making it all part of the viewing experience.
As viewing habits change, it’s more important than ever before that advertisers leverage data driven media buying. Effective use of audience data will allow brands to present relevant messages and ensure a positive ad experience. Doing so will lead to more impactful communications and stronger brand-consumer relationships. Getting all these elements right will help make ads accepted as part of the viewing experience.
What does the future hold for streaming services?
In short, it’s far too soon to tell. However, it looks likely that consumers will be accepting of adverts on the streaming platforms – if it means a cheaper package price. Many of us already watch on demand services such as All4 which have always included ad breaks. It won’t take too long until advertising is once again accepted as part of the viewing experience. After all, we all happily lived with advertising in our programmes for many years before the streaming services came along. It shouldn’t be too much of a mindshift to go back again. The more exciting news is the targeting opportunities this will bring, watch this space for more info!
Contact us to find out how TV advertising can boost your brand. For more information on
*Research from the Trade Desk 2023