The top eight SVOD services—Max, Netflix, Disney+, Discovery+, Paramount+, Prime Video, Hulu, and Peacock—have basic ad-supported subscriptions.
Through its Video Services Consumer Insights Dashboard, Parks Associates’ most recent research revealed that 56 million users (46%) of US Internet households are Cord Cutters, meaning they have unsubscribed from their cable services to migrate to streaming, especially ad-supported services.
In addition, 12% of U.S. Internet households are Cord Nevers, meaning they have never subscribed to any type of traditional pay-TV.
Parks Associates revealed that service providers are adapting through competitive pricing strategies, bundled options, and hybrid monetization models.
The growth of ad-supported video-on-demand (AVOD) and free ad-supported streaming TV (FAST) services demonstrates the increasing demand for cheaper alternatives.
According to Parks Associates research, as of Q3 2024, 59% of subscriptions across the top eight SVOD services—Max, Netflix, Disney+, Discovery+, Paramount+, Prime Video, Hulu, and Peacock—are at the entry-level with ads.
At the same time, subscription platforms continue experimenting with tiered pricing and exclusive content to retain customers.
“The Cord Nevers represents a unique opportunity for streaming providers,” commented Jennifer Kent, vice president of Research at Parks Associates.
“By definition, this segment of the market has never paid for traditional pay-TV, but streaming services have found a way to monetize an audience that either didn’t value subscription video before or has grown up in an environment where streaming is the norm, with a different conception of what subscription video should be,” Kent said.
As for the major streaming services, many consumers prefer the ad-supported basic tier over the more expensive ad-free premium tier.
To achieve cost-effectiveness and provide a balance for consumers, many of the most popular services now operate under a hybrid model, with both ad-free and ad-supported plans. The ad-supported tiers are cheaper for consumers and more profitable for businesses, making them a win-win solution.
“Consumers are exhausted by the continually rising costs of streaming, while years of high inflation have led them to reduce their spending,” Kent explained.
“This only intensifies competition among streaming providers and will encourage further growth in ad-supported subscription tiers and ad-based free services,” concluded the VP of Research at Parks Associates.
