Consumers Are Thriving in a Rapidly Changing Video Market

According to Parks Associates research, “Cord-cutters,” or consumers who have terminated traditional pay-TV services, make up around 37% of all US internet households. They reflect the rising consumer interest in streaming video services.

Cord-cutter spending is about 6% less than the overall OTT subscriber population and 32% less than what consumers were paying in a traditional pay-TV agreement. On average, cord-cutters spend about $80 per month on OTT services.?

AVOD services (e.g., Crackle Plus) include a library of on-demand content that viewers can access at any time with ad breaks built in. Free Ad-Support Television (FAST) services (e.g., Pluto TV) are more similar to linear TV as viewers can choose from a variety of channels with scheduled programming and commercial breaks. Both services are free to users.

Ad-based services are becoming more popular among consumers increasingly fatigued by the plethora of options, associated costs, and pressure to choose that comes with a subscription video-on-demand (SVOD) service. Today, 33% of US internet households watch ad-based OTT services, possibly because FAST services in particular offer a no-cost “lean back” experience where choosing content is simplified to selecting a channel rather than a particular program. As budgets tighten, even more consumers may gravitate towards these ad-based services.

Providers then have an opportunity to partner with advertising companies to design tailored content and marketing campaigns based on specific interests and behaviors derived from data.

Some examples of recent unique ad-based partnerships:

• VIDAA and Amagi announced a partnership to expand FAST services globally.
• AVOD service Crackle Plus partnered with PetSmart to deliver Pet Caves, a pet-centric home improvement series.
• A + E partnered with Opendoor to create Move or Improve, a show about the decision to sell or remodel.

Download our complimentary whitepaper "Engaging Next-Gen Video Viewers: Leveraging AI and ML" in collaboration with FPT Software . This whitepaper addresses the increased consumer use of video services and content preferences, discovery challenges, and the role of bundles shaping the market now and in the future. It also shows how streaming businesses can use artificial intelligence (AI) and machine learning (ML) to drive engagement and monetization. Download now: https://bit.ly/3XCPil3