Streaming services have seen a recent surge in viewership during the first half of 2020, obviously in part from the huge contribution COVID-19 plays in keeping people off work and at home. But a recent study shows it’s the ad-free streamers who are getting most of the growth, not the ones supported by ads.
Streaming services like Netflix, Amazon Prime, and Disney+ with no ad interruptions have seen major growth in engagement during the pandemic lockdowns, while AVOD streamers like Hulu’s basic tier didn’t benefit as much. In fact, Hulu experienced a sharp decline in viewers seeing a 2.9% fall in engagement from February 3 to May 11.
These statistics are leading analysts to believe viewers are becoming more selective with their viewing habits. People who may use to have been fine sitting through some advertisements in order to keep subscription costs low are now showcasing finer tastes for what they’re willing to put up with in terms of interruptions.
Barclays analyst Kannan Venkateshwar cited Nielsen reports that show Hulu was at the bottom of the food chain in terms of growth during lockdown, with viewing growing 107% during the pandemic period. Netflix saw a rise of 116% and Amazon grew 124%. YouTube came out on top reporting an increase of 134%.
People are getting more and more accustomed to watching content straight through, so when a commercial comes on in between scenes, it’s a little frustrating. Even subscribers who chose the lowest tier plans full knowing they’re ad-supported tend to get annoyed when they’re accustomed to other services that are ad-free.
“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,” Venkateshwar wrote. “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.”
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