The audience for free ad-supported streaming services is growing at a rapid clip, creating ever-more fertile ground for the advertising community. That’s a key takeaway from The Stream, the second annual research report offered by Tubi, which is Fox's ad-supported video-on-demand (AVOD) service.
The report's research shows that the audience for AVOD services grew by 16 percent last year, compared to eight percent for subscription video-on-demand (SVOD) ventures. To put that in more context: Comscore estimated AVOD households at 72 million, and SVOD at 74 million, in September 2021.
The Stream projects that during 2022, the universe of AVOD users will surpass the SVOD user base. The report also forecasts that AVOD ad spend will surge to $31.5 billion a year by 2026 -- three times the projected AVOD spending this year.
AVOD "has become mainstream," Karl Dawson, Tubi's Vice President of Audience Research, tells MediaVillage. "I didn't expect the growth rate to be as significant as it is."
First- and third-party data sources contributed to the study, including MarketCast who surveyed more than 6,000 adults 18 years and up during the last three months of 2021.
Dawson believes that several dynamics are at play. For example, the viewership surge is across-the-board, including multicultural demographics. More than 40 percent of Tubi's user base is multicultural, according to the report. Another segment of people contributed the growth as well: high-income, highly educated citizens in every demographic category.
In total, Tubi's audience watched 3.6 billion hours of programming last year, a 40 percent year-over-year rise from 2020.
One reason for the increase is more consumer-friendly ways of accessing AVOD content, whether through over-the-top or cable connections. That has attracted new users while increasing the time spent among current users.
"It's easier than ever," Dawson said. "If you search for a movie, the [interface] will show you the variety of options you can watch on a service like ours or other ad-supported video platforms. More and more people are finding the door. They're coming in and checking it out, provided we offer them a good experience."
There's another growth driver: the increase in households with smart TV sets and devices incorporating voice-activated services like Siri, Google Assistant and Alexa. "That's something we're all beholden to, in the sense that these assistants, we hope, have everything indexed properly," Dawson said. "They're very good at that."
Audiences are also attracted to the wide variety of AVOD program choices, from first-run series and movies to round-the-clock showcases of current and classic favorites, from The Graduate toHell's Kitchen. Tubi has more than 40,000 TV shows and movies in its catalog and is in the midst of rolling out its first batch of original content, which will cover 140 hours in the first year alone.
Originals now in circulation include adult animated series The Freak Brothers and the full-length feature movie Howard High, which premiered earlier this month.
"It’s important to have new, fresh content offerings," Dawson continued. "It's a good strategy for any [AVOD] platform to pursue." Look for a growing number of originals on Tubi every year, he added.
Dawson expects that as AVOD viewing overtakes SVOD, it will attract more advertisers because of the reduced ad load compared to linear and broadcast TV, and the ability to test out interactive ad formats. The load (four-to-six minutes per hour in Tubi’s case) "creates a more positive viewing experience," he said.
During the 2022 Upfront/NewFront sales cycle, Tubi will explore opportunities to customize AVOD campaigns for specific advertisers and monitor the industry's appetite for launching interactive and t-commerce commercials, Dawson explained.
"People anecdotally, when asked about services, do express excitement, and surprise, about how few ad breaks there are in the content available to them," he concluded. "That creates a good relationship between the viewer and the service."
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