The streaming television landscape is increasingly competitive. Experimenting with the formula for success, many streaming services are introducing ad-supported tiers, while others are raising subscription fees and consolidating corporate offerings. Therefore, understanding consumer preferences regarding payment methods, perceived value, and preferred providers is crucial to meet audiences’ changing needs in an evolving environment.

Hub Research’s new report, Monetization of Video, delves into the evolving dynamics of the TV business from a consumer perspective. The study shows that nearly half (43%) of respondents reached their set limit of seven different TV services and said no more. Another 35% of respondents actively set a limit of seven TV subscriptions but have yet to reach that maximum number. Limiting the number of TV subscriptions indicates (seven appears to be the magic number) that consumers are becoming more selective about the services they choose, seeking quality over quantity.

Usage and subscription

The report also shows that 44% of respondents spend more time on TV than a year ago, indicating a growing investment in the medium. Approximately 40% of Tubi or Pluto users rated these free platforms as the highest value, suggesting their investment in FAST content and user experience is paying off.

Furthermore, the research highlights that value perception among consumers is similar between ad-free and ad-supported versions of platforms. This suggests that consumers are willing to accept advertising if it allows them to access content at a reduced cost or for free. Providers should consider offering ad-supported and ad-free options to cater to a broader range of consumer preferences.

The study also finds that a significant portion of viewers (42%) sign up for a new platform but cancel shortly after. This trend is particularly prevalent among Gen Z viewers and those with children. Moreover, the research indicates that the more paid TV subscriptions a consumer has, the more likely they are to subscribe to a new service and cancel it soon after.

Assessing consumer perspective

Importantly, the HUB analysis provides insights into the consumer perspective on the streaming market and factors that influence their perception of value. The research looks at the complexity of the television landscape. It identifies how friction points, FAST channels, and economic factors affect consumer decisions and value perceptions.

• Friction points and erosion of perks: Traditionally taken-for-granted perks, such as password sharing and content exclusivity, are starting to erode, leading to a higher level of friction among consumers.
• Rise of FASTs: Competition in the subscription video-on-demand (SVOD) space is intensifying with the emergence of Free Ad-Supported TV (FAST) services. Media companies and TV manufacturers are entering this arena, further diversifying the TV landscape.
• Economic factors: Consumer concerns about inflation and the economy’s state are additional variables shaping TV consumption choices.

Hub’s research offers insight into consumers’ evolving preferences and dynamics within the streaming industry. As the landscape becomes increasingly complex, understanding consumer payment preferences, value perceptions, and the optimization of content monetization is crucial for content services. By adapting to these changing preferences and offering compelling features, services can improve consumer satisfaction and grow revenue in this evolving industry.