Subscribers would quit video streaming services if they ran ads
New research out today reveals that almost three quarters (72 per cent) of UK Subscription Video on Demand subscribers do not consider any form of sponsorship or advertising on their paid for service acceptable.
The new study, called VODyssey, which was conducted by research consultancy Differentology, surveyed over 2,000 UK consumers to explore consumer sentiment on SVoD services.
Over a fifth (23 per cent) of Netflix subscribers surveyed said they would upgrade to an ad-free premium model, should Netflix begin to show ads.
Moreover, 39 per cent of the same group said they would either cancel their subscription or switch to another paid service that did not carry ads.
It’s not surprising really. One of the best things about streaming video services like Netflix is that they have no adverts ruining our favourite shows like Narcos, The Crown and Grace and Frankie.
Ads unacceptable on paid-for streaming services
“While advertising on SVoD services is currently not seen as acceptable by the majority of consumers, 43 per cent of those who expressed a preference agreed that they accepted and enjoyed advertising on Video-on-Demand and catch-up services, such as ITV Hub”, said Dan Brilot, Head of Insight at Differentology.
“Models for future SVoD services need to understand legacy relationships with existing broadcasters and their ‘permission’ to advertise on their VoD platforms.”
Low churn in ‘ad free’ market
The study also unveiled incredibly low churn in the market, with 66 per cent of SVoD subscribers claiming to have never cancelled their subscriptions.
Just under a third (32 per cent) said they wait less than three months to re-subscribe to the same platform.
The research also noted that the SVoD market has plenty of room for growth. Some 37 per cent of current subscribers said they are likely to take up another service in the next six months, 65 per cent of whom said the new service would be in addition to their existing one.
Potential for BBC/ITV service Britbox
Over two fifths (44 per cent) of UK consumers said they would be likely to subscribe to a service like Britbox, with the figure rising to 60 per cent for those under 35.
More than half (55 per cent) of those who would be likely to subscribe said the new service would be an addition to the services they already have.
“The mix of low-rolling monthly subscriptions, in addition to episodic content, means SVoD has unusually high levels of loyalty as a category, with one in six claiming to always go to an SVoD service first when deciding what to watch”, Brilot said.
“The figure rises significantly for 16-to-19-year-olds, with over half (53 per cent) never going to live TV first, while 17 per cent of the age groups claim the number of paid SVoD subscriptions in their household will increase over the next three years.
“New entrants, such as Britbox, seem set for success, provided the price point is in line with current SVoD providers.”
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