American film and TV fans are taking advantage of ad-supported streaming services as a way to reduce expenses on their end, according to a new report released by Xperi’s TiVo on Tuesday.
The Q4 2024 Video Trends Report indicates streamers are growing aware that they are purchasing more access to streaming services than they may necessarily use in a given period. To address this, more are switching to ad-supported plans — which often include the same TV shows and movies, but at a lower price point — and simply turning off services they don’t use entirely.
The average American household pays for an average of just under 10 streaming services per month, down from slightly over 11 logged during the final quarter (Q4) of 2023, Tivo said. By switching off services they don’t need, and by switching over to ad-supported services when available, TiVo says the average household is saving around $20 per month when compared to the prior year, with the average household spending less than $160 on their monthly entertainment needs — the first time the figure has dropped below that threshold in four years.
In prior years, TiVo said consumers preferred ad-free streaming options in order to watch TV shows and movies without commercial interruptions. Over time, as prices started to increase, consumers became more “ad tolerant” — willing to buy services that are supported by ads if it gave them a break on costs.
Consumer ad tolerance is now at 76.2 percent — the amount of streamers who affirmed their willingness to buy a service with commercial interruptions — compared to 75.3 percent during Q4 2023.
In addition to cost, streamers say personalization is of paramount importance, with consumers wanting services to bubble up new TV shows and films to watch based on what they’ve already seen and enjoyed.
“We are seeing a shift in consumer priorities as they look for ways to reduce the number of services they use without sacrificing access to quality content,” Geir Skaaden, the Chief Product and Services Officer at Xperi, said in a statement. “As consumers face economic uncertainty, there will be increased pressure on the entertainment industry to deliver quality content and keep users engaged for long periods of time. There is a chance we will see a similar spend and entertainment consumption trend from that in which we experienced during the pandemic, with consumers searching for cost saving measures and spending more time at home, increasing the value in which consumers place on entertainment. This new balancing act is, and will continue to put more pressure on the entertainment ecosystem to deliver value with relevant and timely content.”
While streaming is now undergoing a major economic shift, one area that is likely to see some stability is pay televison — specifically, cable and satellite TV. Xperi says the number of consumers who said they’re willing to “cut the cord” — drop their cable or satellite TV package for cheaper options — declined 2 percent during Q4 2024 compared to the prior year, an indication that consumers who wanted to move away from pay TV have already done so, while those who value the channels and features that cable and satellite TV provide are sticking with it for a while longer.
TiVo said cable and satellite continues to see interest from sports fans — which isn’t much of a surprise, given that the majority of premium sports is still available on broadcast and cable networks, even if more streaming services like Netflix and Amazon’s Prime Video are capturing limited rights for themselves.
While football is widely available on broadcast and cable networks (even games that are “exclusive” to Netflix and Amazon’s Prime Video are available on broadcast TV in the markets of the two teams playing), regional sports networks like FanDuel Sports Network, NBC Sports, MSG Network and Altitude continue to hold in-market rights to baseball, basketball and hockey games. Slowly, those services have launched their own streaming alternatives for cord-cutters, but their high price — on average, the services cost $20 per month — coupled with the fact that some games are aired on national networks means cable and satellite is still a better value for hard-core sports fans.
The full video trends report from TiVo is available to view by clicking or tapping here.
