If you watch live sports on Sky or Dazn, you’ll know that ads play before and after each game, as well as during breaks – even though you’ve already paid a subscription fee to access the service. Things are different for subscribers to providers of movies and series, where the USP is that fiction programs are not interrupted or bracketed by ad breaks – to date, at least. That could be about to change. Netflix, the industry leader, is considering adding an ad-financed and potentially cheaper tier by the end of the year.
So, what do Germans think about advertising on streaming services? The verdict is clear: 66% of the 2,500 users of online video platforms surveyed by Civey in May and June are not prepared to accept ads in their streamed content, even if that would reduce subscription fees. Only 23% would consider a cheaper tier with advertising content. And if streaming portals still press ahead with introducing ads, a mere 12% would be open to paying more for an ad-free subscription. The survey also indicates that the potential revenue for broadcasters is negligible, with just 10% of respondents prepared to pay over 5 euros a month more for ad-free content.
Figures for both subscribers and sales rose significantly during the pandemic for streaming services. The favorite streaming platforms for Germans are currently Amazon Prime (61%) and Netflix (56%), with Disney+ (which only launched in early 2020) trailing them in third place (21%). Sky (13%) has around twice as many users as Dazn (6%), which only provides sporting content. German providers RTL+ (7%) and Joyn (4%) occupy the bottom two spots.
Commercial breaks are universally unpopular with those surveyed, with around 25% prepared to tolerate ads before and after a movie or series at most. Approximately 14% would put up with advertising content at any point if it came with a “Skip” function – like on YouTube, for example.
So, is increasing the subscription fee in return for ad-free content likely to be a promising and profitable business model? Few users seem prepared to pay for this service: 23% of respondents would pay up to 5 euros a month more for ad-free content, and just 10% would pay over 5 euros a month more.
Professor Dominik Matyka, Chief Advisor of the DMEXCO, comments on the results: “Many users say the freedom from advertising on streaming platforms is a key USP for them. Even if survey results don’t automatically correlate with behavior in real life, the result of this survey is clear: streaming platforms should think very carefully before abandoning their USP. Advertising in return for a cheaper subscription doesn’t appear to be popular right now – at least in Germany. We will also have the opportunity to discuss these issues face-to-face in September, when DMEXCO takes place in Cologne.”
About the survey
DMEXCO commissioned market research company Civey to conduct an online survey between May 27 and June 6, 2022, of more than 2,500 users of online video platforms in Germany.
Image material for DMEXCO is available online at https://go.dmexco.com/press-downloads-dmexco.