Are AVOD and FAST gains at the expense of SVOD? Maybe not!

New data shows AVOD and FAST services are now used weekly by 2-in-5 US adults. The data also shows SVOD penetration fell a little in the third quarter of 2021. Are the SVOD/FAST gains at the expense of SVOD? Not necessarily!

Free ad-supported viewing on the rise
New data from Vizio Ads and Magid shows that AVOD and FAST services have already established a solid position in people’s streaming lives. Further, it shows that most smart TV owners are now regularly watching ad-supported content.

The Magid data shows that 42% of non-smart TV owners watch FAST services each week, and 39% watch AVOD. However, 53% of smart TV owners watch FAST services each week, and 55% watch AVOD. Why do smart TV users watch more free ad-supported content than non-smart TV owners? Smart TV manufacturers are featuring their built-in services in the home screens of their televisions. For example, Vizio, the sponsor of the Magid survey, features content available in the built-in Watch Free FAST service in the hero bar on the home screen.

If we watch more AVOD and FAST services, does that mean we are spending less time with paid services?

US SVOD penetration slips
According to Kantar, the proportion of US homes with SVOD declined a percentage point in the third quarter of 2021 to reach 85%. However, one year ago, penetration was 83%, 2% lower than in the third quarter. The quarter-over-quarter decline, Kantar says, was led by ad-free SVOD services like Netflix and Disney+, which declined 1.5%. Presumably, services like Hulu, HBO Max, and Discovery+ – all of which have paid tiers that include ads – fared a little better.

The small decline in penetration, however, is not evidence that streamers are watching less ad-free content. Kantar says that service stacking – SVOD subscribers that add another service – is on the rise. In other words, service stacking could mean the number of subscriptions could be rising even as penetration declines slightly.

Since none of the major SVOD services report watch time, we can’t say if streaming time is up or down. We can say that interest in SVOD services remains steady. JustWatch data shows that interest in Netflix is down a little while HBO Max and Disney+ are up. But overall interest in SVOD remains strong.

Where the AVOD/FAST viewing is coming from
SVOD viewing time may not be suffering at all due to the increase of AVOD and FAST viewing. Nielsen data shows that between 2018 and 2020, the amount of time spent streaming to all screens increased by 30 minutes a day. People are spending more time streaming and adding ad-supported to the mix.

Streaming’s gain is traditional TVs loss. Nielsen’s data shows that the total time watching video through all screens in the US has remained about the same between 2018 and 2020. The average American watches about 5 hours and 20 minutes a day. What has not remained the same is our time spent with traditional TV. It has fallen by 34 minutes per day or about 13%.

One other factor to keep in mind is that late adopters are adding streaming to the viewing mix. This group has stuck with traditional TV throughout the streaming revolution. It is natural for them to gravitate towards what they know when they start streaming. And that is where the FAST services built into smart TVs win. They provide easy access to the most familiar format of TV: free ad-supported channel television. nScreen Media