Netflix and Disney’s Ad Tiers Are Winning Over New Subscribers | Exclusive
Six months after the launch of Netflix and Disney+’s ad-supported tiers, the offerings have seen strong adoption among new subscribers to the services.
According to findings from a survey of 2,506 U.S. adults by Samba TV and HarrisX shared exclusively with TheWrap, 19% of Disney+ subscribers and 11% of Netflix subscribers took advantage of the services’ ad-supported tiers. Within these groups, only 15% of each downgraded from a previous subscription. The remaining 85% signed up after the ad-supported tier was introduced.
In comparison, 26% used Netflix’s ad-free basic tier, 29% used the standard plan and 24% used the premium plan. As for Disney+, 29% of subscribers surveyed used the premium plan, 15% used the Disney+ Trio Premium bundle, 13% used the Disney+ Trio Basic bundle and 9% used the Disney+ Duo Basic bundle. Meanwhile, 8% of Disney+ subscribers and 6% of Netflix subscribers reported using someone else’s login information.
The survey, which was conducted online from March 23 to March 27, weighted its results by age, gender, region, race/ethnicity, income, mobile carrier, streaming subscriptions and political party where necessary.
“Our data tells us that ad-supported options represent a path toward more subscriber growth and the overwhelming majority are net-new,” Samba TV founder and CEO Ashwin Navin told TheWrap in a statement.
The survey found other insights on consumers’ streaming and ad-viewing behaviors, password sharing and live programming preferences.
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Streaming behaviors
Netflix leads the streaming market in terms of usage, followed by Amazon Prime Video and Hulu, the survey found. Approximately 46% of Netflix subscribers surveyed ranked it as their preferred service based on time spent, compared to 13% of Disney+ subscribers surveyed who said the same about that service.
When looking at streamers’ content release models, men (43%) and Millennials (48%) preferred watching shows that dropped an episode once per week, while women (47%) and Gen Z (48%) preferred watching shows that dropped an entire season all at once. Netflix and Prime Video had the lowest rate of binge watchers compared to the other top services, while 82% of Paramount+ and Max subscribers were found to binge content.
Action is the most popular genre of television shows or films to watch among the survey’s respondents, with 22% saying they watch it most often, followed by comedy (18%) and drama (17%). Action is most popular among men (34%), while women prefer drama (21%) and comedy (20%) and prefer horror and true crime at the same level as action (11%).
When looking specifically at Disney+, 61% of subscribers surveyed said that the service has right amount of grown-up content, while 35% want more grown-up content. Only 29% of Netflix subscribers surveyed said the streamer cancels too many shows, though 54% of Gen Z respondents felt that was the case.
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Ad-viewing preferences
Of those who said none of their current streaming subscriptions show them ads, 37% of respondents said they would consider subscribing to a discounted streaming service if it meant watching advertisements (versus 40% who said “no” and 23% who said “not sure”), with 32% of men and 41% of women open to the idea. This is much lower than the 60% of all streaming customers who would consider it.
Nine in 10 respondents surveyed said they see ads for the same products and services at least somewhat often in the past month. Three out of five said they are either indifferent towards advertisement or like hearing about products/services through ads, but 62% said it only takes two to five repeated viewings of the same ad in a month-long period to worsen their perception of the brand.
About 42% of streaming subscribers surveyed said they would prefer ads to take place during the beginning of a show or movie, compared to 19% who would choose to have ads in the middle and 16% who preferred ads at the end of what they’re watching. About 23% said they would select a mix of all three. Half of respondents said they would be fine seeing two to three ads while watching an episode or movie, compared to 26% who said they would be OK with one and 19% who said no ads. Only 6% of respondents were OK with four or more ads.
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Live programming
When respondents were asked about their interest in live events on streaming services, sports and comedy shows (54% each) were the most popular among those who said they would tune in.
Netflix has tested the waters of live programming with “Chris Rock: Selective Outrage” and the “Love is Blind” Season 4 reunion. It also struck an agreement with the Screen Actors Guild Awards to livestream the ceremony starting in 2024 and is reportedly in talks to livestream a celebrity golf tournament slated to take place this fall in Las Vegas.
Meanwhile, Disney+ entered the live programming space with its latest season of ABC’s “Dancing With the Stars.” According to Samba, 38% of Disney+ subscribers surveyed watched the reality dance competition series’ latest season. Two in three respondents preferred to watch on Disney+, compared to 2% who preferred ABC and 11% who weren’t sure.
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Password sharing
Roughly 40% of respondents with a streaming subscription reported sharing their password with someone else. When broken down by generation, 62% of Baby Boomers reported sharing passwords, followed by 48% of Gen X, 26% of Millennials and 21% of Gen Z.
Of those surveyed who share passwords, 57% said they share with one to two people. Millennials were more likely to share with more people. Sharers by far most frequently share with family members in the same household, followed by family members from a different household. Of U.S. adults who share and borrow streaming services, 70% say Netflix is a service they are most likely to share with others.
Netflix has estimated that 100 million households are sharing passwords globally, including 30 million in the U.S. and Canada. The company plans to roll out its paid-sharing features in the U.S. during the second quarter.
More than a third or 37% of current Netflix subscribers surveyed said they would cancel their account if they could no longer share their password with people outside their home. Approximately 52% of Gen Z and 51% of Millennials said they would cancel their accounts, compared to around a quarter of Gen X and Baby Boomers who would do so.
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