Will Ad-Supported Subscriptions Help Streamers Survive Cost Of Living Crisis?

Streaming infrastructure provider Bitmovin has unveiled new research showing that over half (57%) of Americans have not canceled any streaming service. Value for money (54%) and the availability of their favorite content (48%) are what will keep consumers subscribed to video streaming services amidst the cost of living crisis. The research also found that one in four (25%) Americans valued the ability to use a streaming service across all devices as one of the top three reasons to keep a subscription.

Bitmovin’s research suggests that in a paid subscription model, the majority (68%, rising to 78% in those aged 18-35) are happy to pay that little bit extra for an ad-free experience. Most viewers (58%) are happy to tolerate ads when it comes to free streaming services, however, it seems if paying for a subscription, no matter the cost, they would like ad-free content.

The study noted that Americans are also keen to prioritize their fitness and education, seeming unlikely to cancel fitness platforms (13%) and eLearning platforms (10%) if they were forced to due to the cost of living crisis.

Stefan Lederer, Bitmovin CEO and founder, said: “Netflix’s announcement may agitate some users, however it is clear they are taking steps to help consumers through the cost-of-living crisis. The cheaper, ad-supported membership, may open the platform up to a net-new audience, but at the same time, our research indicates loyal viewers are happy to pay that little bit extra. For Netflix, it’s the best of both worlds.”

“What stands out from the research is that amid global economic challenges, consumers are looking for value for money in all aspects of their lives and video streaming services are not exempt. High-quality viewing experiences and the ability to stream seamlessly are consumer requirements now. And this is the case, across not just all devices, but also across a range of subscription types, from entertainment to fitness to education and more. These factors are fundamental when considering a streaming service’s value for money, with pure content no longer the be-all and end-all for subscribers.”

The study showed Americans are still spending six hours per week watching paid-for entertainment streaming services and just three hours on free entertainment platforms on average. Mobile phones are the second most popular choice for viewing streamed content (49%), behind connected TVs (67%), much higher than tablets (23%) and laptops (25%).

Lederer concluded: “There’s still a huge demand for video streaming platforms. Streaming platforms that want to remain ahead of their competitors need to closely examine their service as a whole and ensure it delivers the best value for money by providing the best online experience, cost-effective bundle options and high-quality content. This is the new battleground for the streaming wars.”

The research was conducted by an external research agency to distribute the survey, collect data and provide results from 2,000 respondents across the U.S.