Third of TV Viewers Choose AVOD Because They 'Don't Mind' Ads: Roku

Streaming is trending toward advertising-supported services, with three in five consumers willing to pay for an ad-supported VOD service if AVOD lowers the monthly subscription cost, said a Roku-National Research Group study Wednesday. More than eight in 10 consumers said one of the biggest factors when choosing a new streaming service is whether there's a choice of free and paid tiers, said the report.

About 23% of AVOD viewers are likely to be cord cutters vs. 14% of subscription VOD users, said Roku. A third of survey respondents said they chose an ad-supported subscription option because they don’t mind ads, it said. AVOD viewers stream more often than SVOD users: 38% stream 20 or more hours weekly vs. 27% for SVOD.

Half of AVOD viewers spend three or more hours in a typical TV streaming session, and 80% said they use another device while streaming TV, leaving brands “ample opportunities to connect with them cross-screen,” said the report. Parents with kids at home are “especially open to ad-supported options,” it said.

Some 80% of consumers are streamers vs. about 75% for traditional TV, Roku said. When consumers want to be “in on the conversation and watch something everyone is talking about,” 71% choose a streaming TV program vs. 20% for traditional pay TV, it said. Audiences are almost five times as likely to choose streaming over traditional pay TV when they “want to get lost in a story,” it said.

Streaming skews toward younger viewers -- with 98% of Generation Z and 96% of millennials streaming -- but 86% of Gen X and 68% of baby boomers are over-the-top video watchers as well, said the report. Boomers who stream have the same number of subscriptions, three, as younger generations, and 40% of them added more services in the past year.

Nearly three-quarters of respondents said having access to a new movie release is a key reason they would try a new streaming service. Almost half streamed a new movie release at home in the past year, and two in three plan to do it more in the future, said Roku, citing convenience and cost savings.

Sports viewing via streaming is growing, said Roku. One in three sports viewers watches via streaming vs. two-thirds via traditional pay TV, it said. Sports viewers via traditional (67%) and streaming (68%) have similar satisfaction levels, it said.

Subscription cycling -- signing up, canceling and re-signing -- is “overhyped,” said the report. Forty-one percent of streamers said canceling a service depends on whether they end up liking it or not. Fewer than 20% have subscription-cycled but not in the past year; 25% did in the past year; and 60% never have, it said. Just 4% have definite plans to cancel a service in the next year, it said. The July survey canvassed 953 18-to-70-year-olds in Canada who watch at least five hours of TV per week via traditional pay TV or a streaming service.