More TV and film fans are using free, ad-supported streaming platforms to account for rising costs associated with premium services, according to a new report released this week.
The report, from the Video Advertising Bureau (VAB), detailing how shifts in cost sensitivity are prompting audiences to embrace ad-supported streaming options, FAST channels, and bundled services. It uses data from third parties to make the case that some consumers are being squeezed out of premium offerings and are taking up more free, ad-supported streaming services to accommodate the crunch.
In the last 12 months, 26 percent of consumers added a free streaming service, and another 24 percent plan to do the same over the next year, based on data from LG Ad Solutions. The cost of ad-free subscriptions has risen significantly—more than 50 percent over the past five years across seven major services, according to VAB’s analysis of EMARKETER data. Meanwhile, 62 percent of CTV viewers say they are concerned about the ongoing cost of these subscriptions.
This value-conscious behavior spans across income levels and age groups. VAB’s analysis of MRI-Simmons data reveals that two-thirds of U.S. adults now prefer ad-supported streaming options over ad-free services.
The growing popularity of free ad-supported streaming television (FAST) is also noteworthy. FAST now reaches approximately one-third of the U.S. population, equating to more than 100 million viewers, according to EMARKETER. This trend reflects a strong appetite for accessible, ad-supported content across a broad user base.
“As audiences re-evaluate the cost of ad-free subscription streaming, consumers of all income levels and age brackets are finding value in ad-supported tiers and services,” Jason Wiese, the Executive Vice President of Strategic Insights & Measurement at VAB, said in a statement. “Viewers are balancing their spending in streaming by shifting towards advertising-based streaming services, watching more content through FAST channels and unlocking greater cost efficiencies through streaming bundles.”
In addition, bundled streaming subscriptions are gaining momentum as households look for ways to control costs while accessing more content. Research from CTAM indicates that nearly half of U.S. households either currently subscribe to streaming bundles or plan to do so in the near future.
Ad innovation is another focal point of the report, particularly the role of interactive ad formats in driving deeper engagement. Viewers spend an average of 71 additional seconds engaging with interactive CTV ads compared to standard pre-roll, according to data from Innovid.
“Marketers can leverage tailored, interactive ads on CTV to drive increased engagement and time spent with advertising which leads to greater outcomes for brands,” Wiese noted.
As the economics of streaming shift, the VAB report underscores the expanding opportunities for media platforms and advertisers to engage with audiences through cost-effective, ad-supported models that prioritize both value and viewer experience.
