Majority of new subscribers to ad-supported streaming are also first time customers, survey finds

Ad-supported streaming options are not just gaining ground but are also creating a new category of consumers.

According to recent data from Samba TV, the majority of new subscribers to ad-supported streaming video plans are first-time customers, signaling a shift in the industry’s paradigm. The company’s latest survey findings underscore that these are not merely cord-cutters or downgraders, but a new breed of streamer.

Samba TV, a leader in providing viewership intelligence across a wide spectrum of connected televisions, conducted the survey with HarrisX from March 23-27, 2023. It involved 2,506 adult respondents in the U.S., shedding light on the uptake of ad-supported plans among two of the most popular streaming platforms: Netflix and Disney+.

Of the Netflix subscribers surveyed, 11% had opted for the Netflix basic with ads plan. It is noteworthy that 85% of these users joined Netflix only after the introduction of this ad-supported tier. Similarly, 19% of Disney+ subscribers were found to be availing the Disney+ basic with ads plan, with the same 85% majority signing up post the introduction of the ad-supported tier.

Such data points reveal a growing interest in ad-supported options among streaming audiences. In fact, Samba’s research found that 60% of the streamers surveyed would consider watching ads if it meant access to a cheaper subscription plan.

The survey also took a deep dive into the preferences of these consumers when it comes to ad placement. Forty-two percent of the respondents favored ads at the beginning of a show or movie, while 19% preferred them in the middle. Only 16% chose to have ads towards the end and 23% wouldn’t mind a mix of all three.

One key factor determining the audience’s ad tolerance was the number of ads per episode or movie. Half of the respondents were okay with seeing up to three ads, while 26% said they would be comfortable with one ad. Four or more ads were only acceptable to 6% of respondents, with 19% maintaining a zero-ad preference.

The study also broached the topic of price sensitivity. Among Disney+ subscribers, only 2% would stick with their ad-supported plan if the price rose. Contrastingly, 55% of Netflix subscribers pledged to keep their subscriptions, even if costs increased.

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On the disruption scale, 22% of those with ad-supported plans found the ads highly disruptive, while 18% thought they were minimally intrusive. Interestingly, 60% felt the commercial disruptions were in line with any other ad-inclusive programming.

Nearly half (48%) of the respondents with ad-supported streaming mentioned seeing repetitive ads, while 46% reported seeing a variety. Females and older respondents were more likely to see repetitive ads, according to the survey.

These findings have led industry observers, including Samba TV CEO Ashwin Navin, to predict an ad-revenue boom.

“Last year, the streaming industry’s focus was subscriber growth, but we can expect the rest of 2023 to focus on the ad-supported tier,” Navin said. “Our data tells us that ad-supported options represent a path toward more subscriber growth and the overwhelming majority are net-new, rather than downgrading from existing plans.”

As the streaming industry continues to evolve, it’s clear that ad-supported options are becoming an essential part of the ecosystem. These new plans seem to be opening up not only more choices for viewers, but also new revenue channels for service providers.