Streaming video consumers are more likely to pay for a subscription-based service if it means they can access a television series that they’ve started watching on a free, ad-supported platform, according to a survey by Horowitz Research.
The study found almost half of customers who used a free, ad-supported streaming TV (FAST) platform this year have ultimately shelled out for a subscription video on-demand (SVOD) service or another kind of premium TV product in order to continue watching a show that they first discovered on a FAST platform.
All told, 43 percent of customers surveyed affirmed they’ve signed up for an SVOD service to stay on top of a TV series they first discovered on a FAST platform, Horowitz reported.
On the flip side, more than half of streaming consumers surveyed — 53 percent — said their use of FAST platforms ultimately drove them to pare back on subscription-based products.
One big reason is that FAST platforms have matured in terms of the user experience and the type of content they offer. Two out of three streaming customers surveyed — or 66 percent — now report using at least one FAST platform on a monthly basis, Horowitz found. The Roku Channel, Fox Corporation’s Tubi, Paramount’s Pluto TV and Amazon’s Freevee are among the leading FAST platforms used by consumers, Horowitz said.
“As the FAST space matures, it does feel like a correction of many of the issues that on-demand streaming created for consumers and the industry,” said Adriana Waterston, EVP and Insights & Strategy Lead for Horowitz Research. “On the consumer side, FAST is helping to mitigate the challenges of TV viewing in the on-demand space, in which consumers had to work pretty hard to find content to watch every time they sat down in front of the TV — not the most relaxing viewing experience. It is also creating opportunities to generate ad revenue and revenue from syndication, which will help put the business model back into balance.”
Most FAST platforms help address the challenges of finding something to watch by replicating the cable or satellite TV experience through linear streams that deliver marathon viewing or group shows around a common theme. Horowitz said 58% of former pay TV subscribers who now use FAST channels say the platforms “are like having cable TV again,” albeit without the monthly bill.
Linear channels help FAST services achieve a “lean back” style of consumption, but some platforms are also helping streamers pinpoint the type of shows they may want to watch. Around this time last year, Tubi became one the first FAST platforms to integrate ChatGPT and other machine learning models into their primary search function in order to help better surface TV shows and movies from its library of tens of thousands of options. Experts who have spoken with The Desk over the past two years say streamers will continue to leverage artificial intelligence to power search and personalization features across their streaming platforms, including FAST.
