According to Samba TV’s new report on viewership for the first half of 2024, over-the-top (OTT) consumption grew by 40% year-over-year, highlighting the rising demand for on-demand content.  However, as audiences shift from linear TV, offering streaming video-on-demand (SVOD), ad-supported options are increasingly vital for capturing and retaining viewers.

Meanwhile, linear TV continues its decline, with a 1% drop in year-over-year consumption and a 2% decrease in average daily reach. As the traditional linear TV audience ages, OTT services are starting to dominate the market. And, as the options and pricing models for SVOD proliferate, streamers are experimenting with a number of marketing methods to stand out.

Growth of ad-supported streaming and FAST channels

During the first six months of 2024, more than half of new SVOD sign-ups were driven by ad-supported options, indicating that consumers are increasingly willing to watch ads in exchange for lower subscription fees. Further, 33% of U.S. streamers now watch content on FAST channels. For advertisers, this shift presents ample opportunities to reach cord-cutters and engage with audiences in a more targeted manner.

As competition intensifies among streaming platforms, effective marketing is becoming more crucial than ever. Many streamers are ramping up their advertising efforts in response, with billions of promotional campaign impressions across linear and OTT channels. Paramount+ and Warner Bros. Discovery’s Max leverage their built-in linear presences to boost visibility.

Churn challenges

Churn is a relevant concern despite the consistent addition of subscribers to SVOD platforms. Samba TV cites Antenna data showing that the number of cancellations is rising to the point where the net additions dropped by over 3 million year-over-year. This high churn reflects a broader trend of “subscription cycling,” where users frequently switch between services to access specific content.

While nearly every household in the U.S. streams content, 44% watch only one or two platforms within six months. This highlights the challenge for streamers: keeping viewers engaged long enough to deter them from canceling their subscriptions. Streamers must optimize their release schedules, promote loyalty through bundling, and emphasize innovative content, such as live events, to combat churn. Importantly, content remains the primary driver behind subscription cycling, as viewers often return to previously abandoned platforms for highly anticipated new shows.

Streamers increasingly leverage bundling, which provides added value to subscribers. The report notes additional Antenna data revealing that users who subscribe to bundles like the Disney Bundle and Apple One (bundles up to six Apple subscriptions for one lower monthly price) are less likely to cancel their subscriptions than those subscribed to individual services. For example, Apple TV+ had a churn rate of just under 9% in March 2024, while Apple One’s churn rate was less than 4%.

Promoting content across a bundled portfolio helps reduce the risk of audiences churning after finishing a single show. Offering diverse content across multiple services can help prevent subscribers from canceling their subscriptions.

Viewer preferences for SVOD

Viewer preferences continue to evolve in the streaming era, with binge-watching becoming increasingly common. Data from Samba TV shows that audiences are more likely to binge-watch docuseries and crime shows when given the option. These genres drive binge rates by over 60%. In contrast, data shows that comedies and dramas are less likely to be binged.

Interestingly, binge-watching is more prevalent among diverse households and in warmer climates. Cities like Houston, Orlando, and Phoenix show higher binge rates than cooler coastal regions. Additionally, Black and Hispanic households exhibit a stronger tendency to binge-watch than white or Asian households.

Linear TV continues to serve a niche audience, particularly for live sports and news, but the growing preference for streaming platforms is undeniable. SVOD platforms, including those with ad-supported models, that effectively engage viewers by offering compelling content and value through strategic bundling are well-positioned to lead the rapidly evolving TV industry.