The COVID-19 pandemic has sparked a surge in viewership in almost all corners from network television to streaming services. The latter in particular has seen a real surge as the average time people have spent streaming has more than doubled since March.
Interesting though, Barclays analyst Kannan Venkateshwar has revealed findings of a study at Deadline into how consumers are getting more sophisticated as they adjust to streaming – and as a result more expensive ad-free subscription VOD services (SVOD) like Netflix and Amazon are growing much faster than cheaper ad-supported ones (AVOD) like Hulu and CBS All Access’ basic tiered ones.
Venkateshwar argues that the data, collected by Nielsen and ReelGood, is a warning sign for AVOD services flooding the market. AVOD advocates say current economic conditions and consumer reluctance to pay for multiple SVOD services means AVOD is the best strategy going forward – Venkateshwar disagrees:
“When consumers pay a la carte for a streaming service like Hulu, it comes with consumer expectations for a certain experience, irrespective of the price point. This experience is defined by the market leader, which happens to be Netflix for video streaming. Therefore, subscribers are likely to inevitably compare the Hulu experience with Netflix, irrespective of the price differential, and this makes Netflix ironically even more attractive despite its higher price.”
Whilst most AVOD remains relatively sidelined (eg. Tubi, Pluto, Crackle), discussion of it in relation to SVOD will come up again soon as HBO Max is planning to release a cheaper AVOD option while the soon to launch Peacock is being sold on being a major AVOD service.
