A Sea Change in Video Viewing: Helping Marketers Find More Fish in the Streaming Ecosystem

October 21, 2020

By Kathy Grey


We are indeed experiencing a sea change in consumer behavior as video streaming becomes part of our daily lives. COVID-19 appears to be the watershed moment we have been gearing up for over the past few years. According to the VAB’s latest consumer research study, “A Sea Change in Video Viewing: Helping Marketers Find More Fish in the Ecosystem,” 70 percent of respondents have become “more comfortable streaming video,” leading them to spend more time viewing streaming across all devices and platforms. With this increased comfort level and more time viewing, consumers are subscribing to more video services, with one-third subscribing to four or more streaming services. What’s really amazing is the 20 percent of respondents who said they were streaming at least once a day, if not several times a day. Young adults and families are leading the charge as early adopters who are now ‘super streamers.’ This change in behavior has been driven by a quest for more and more content, as we continue to shelter at home due to the ongoing pandemic.

In June of this year, VAB conducted a custom study to capture and understand the evolving media consumption habits and behaviors of adults following the first few months of the COVID-19 pandemic. The results are based on 1,000 U.S. adults 18 and older in households with access to streaming services and who have viewed content on streaming services. The respondents cover all age groups, races and ethnic backgrounds. What we learned from this study, were key insights into consumers’ next normal video viewing habits and what impact this has on marketers.


AVOD Is an Incremental Reach Opportunity

As more and more streaming video services hit the market, we wondered how people felt about paying for streaming services and what that threshold may be. In our latest research, VAB has learned that more than half of our respondents believe streaming video services are a good value for the money; however, there are limits to the amount they are willing to spend, even though there are no limits to the amount of content they demand. This is leading the way for advertising-based video on-demand (AVOD) services to break through and establish themselves as viable viewing options, giving marketers the opportunity to expand their reach and target potential customers across screens.


Content is King

Content hungry viewers subscribe to multiple services, and are happy to stack AVOD services on top of their subscription video on-demand (SVOD) services. (27 percent of SVOD users also subscribe to AVOD services)

AVOD services are available to satisfy viewers’ desires for premium content of all types including current TV shows as well as classic library content. More than 70 percent of AVOD users agree with the statement, “I like the large selection of TV shows and movies they offer.” 67 percent said they “like having access to every show, past or present” and more than 50 percent “enjoy the original content the service offers.” As a matter of fact, nearly half AVOD audiences surveyed found themselves streaming more free, ad-supported video content than paid content, and 40 percent were hoping for the launch of more free streaming services.

In their quest for more content, advertising is not a deterrent, in fact 53 percent of AVOD users appreciate the fact that ads are making their service cheaper” and 35 percent admitted “they don’t mind seeing ads in free streaming services.” The industry understands these needs and has committed to limiting commercial time and using creative, interactive, shoppable ads to increase consumer engagement and make the ad experience more appealing to their viewers.


AVOD is in Growth Mode

Since COVID-19, viewers have not only been signing up but watching AVOD services at higher rates, resulting in an increase in impressions and revenue across all major AVOD services. Content-hungry viewers subscribe to multiple services, showcasing room for growth for ad supported services, especially as we hit the limit consumers are willing to spend on paid services. As the demand for content increases and competition abounds, even the largest of the streaming services is offering incentives to increase subscriptions. In late August, Netflix announced a deal offering free access to select original movies and series, even without an account. This is changing the face of the video streaming industry.

According to Comscore’s State of OTT Report, in April of 2020, 58.5 million households were using AVOD, an increase of 9 percent as compared to January, 2020. As usage increases, so does ad revenue, which rose 31 percent in 2Q 2020.


Opportunity in the Ad Experience

Viewers accept and appreciate that ads are a ‘part of the deal’ in getting free content. With this attitude from consumers, comes a marketing opportunity to be creative, interactive and targeted with your brand message and build relationships with these highly engaged viewers.

According to our research, viewers are not deterred by advertising, in fact they acknowledge that ads make their viewing experience more affordable, with 53 percent of AVOD users and 41 percent of adults 18-34 agreeing that “they appreciate the fact that ads are making streaming services cheaper for me.” We also found that 35 percent of AVOD users and 25 percent of adults 18-34 “don’t mind seeing ads in free streaming programming”.

AVOD subscribers said they appreciate the limited commercial load and customized creative found in a free subscription streaming environment. The industry is responding to the consumer feedback by committing to limited commercial time and the increased use of interactive advertisements that encourage engagement with their targets.


Looking to the Future

As smart TV sales and streaming services become more of a daily activity, consumers are looking for an easy way to engage with their favorite services — they want to turn on their TV and find their favorite content, whether that’s a network or streaming service program, it makes no difference to them, they just want to be able to easily tune into one of their favorite forms of entertainment. Our research shows when considering video streaming attributes, 8 in 10 consumers place a high importance on ease of use and 58 percent value availability across devices.

In addition to ease of use, consumers are looking for bundles across all forms of entertainment. In fact, many of the major media companies are setting up bundle partnerships to entice new subscribers by making their services more accessible to viewers, as well as more affordable. More than half of our respondents said they agree completely with these statements: “I wish there were discounts for bundling certain streaming services” and “I wish there were one bundle I could buy that included everything.”

Kathy Grey is SVP of research innovation at VAB.

The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

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