Providers of subscription-based streaming services in the UK could lose up to £97.3m in revenue because British consumers are now more open to ad-supported content and are no longer prepared to pay as much for their monthly fee.
According to ad tech company The Trade Desk, seven out of ten Brits say they would not spend more than £20 per month on streaming services, a fall of £5 compared to September 2019 when the same proportion was willing to spend up to £25.
Extrapolating the finding to the overall UK population, that could mean a loss of up to £97.3m potentially available to subscription-funded streaming services, such as Netflix and the recently launched Disney+.
In addition, one-third of viewers (33%) now say that £10 is the maximum they would be willing to spend on a monthly subscription to streaming services, up from 26% who cited the same figure last September.
Meanwhile, between September 2019 and April 2020 – when The Trade Desk commissioned a survey of 1,500 adults in the UK – the number of consumers prepared to spend over £25 per month has more than halved.
“As COVID-19 has driven the nation into lockdown, Brits have turned to streaming services to fill their new-found free time. But while people want access to a variety of premium content, there’s a limit on how much they’re willing to pay,” said Dave Castell, general manager of inventory and partnerships at The Trade Desk.
“And with purse strings tightening, it’s time to think about how ad-funded models could benefit consumers, as well as supporting multiple streaming services,” he added.
His reasoning is underpinned by further survey findings that, while 60% of UK respondents believe streaming services are too expensive, a similar proportion (58%) have signed up to a new streaming service since the COVID-19 lockdown began on March 23rd.
As a result, acceptance of ads has grown. Some 70% of the survey participants say they prefer to see more relevant advertising than pay more to watch TV, while 84% say they are open to ads if it means they can watch an episode of their favourite show for free, without interruption, afterwards.
Furthermore, nearly half of those surveyed (47%) would prefer to watch streamed content using a free, or cheaper, service supported by ads.
“This data reveals a clear willingness amongst UK consumers to accept advertising if it means accessing their favourite shows for cheaper prices, or for free, but it’s vital that it’s done right,” said Castell. “Ads must be creative, relevant and appropriately timed to keep consumers content.”
Sourced from The Trade Desk; additional content by WARC staff