The increasing presence of advertising in subscription-based streaming services initially created for entertainment without any advertising has been a point of contention for consumers. As streaming services look to advertising as a new source of revenue, it is important to consider how consumers will respond to this shift. Streaming services need to consider the type and frequency of ads to ensure that they do not negatively impact the consumer experience. Some may welcome the addition of advertising as an additional revenue source that could lead to lower subscription costs or the introduction of new content (Bennhult & Frogner, 2021). Others may find advertising intrusive and disruptive to their viewing experience and may be willing to pay a higher subscription rate to avoid it. This paper will explore a variety of perspectives on how consumers will react to the rising presence of advertising in subscription-based streaming services, such as changes in consumer behavior, the potential for consumer backlash, and the effects of advertising on the user experience.
The growing presence of advertising in streaming services will likely result in changes in consumer behavior. A study by Bennhult & Frogner (2021) found that increased exposure to advertising led to increased user engagement with the ads. This suggests that when exposed to more advertising, consumers are more likely to interact with it, making them more likely to purchase the advertised product. As advertising becomes more prevalent on streaming services, consumers may adapt their viewing habits to accommodate the presence of advertisements. For example, consumers may opt to watch shows or movies in smaller chunks to minimize the time spent watching advertisements. Additionally, research from Tana et al. (2020) indicates that consumers are more likely to pay for streaming services that use advertising than services that do not. This suggests that consumers may be more likely to pay for advertising services if they are convinced that the ads are providing them with value. As streaming services become more commercialized, consumers may become accustomed to the presence of advertisements and accept them as a necessary part of their streaming experience. This phenomenon has been observed in other industries, such as television, where consumers have become accustomed to advertisements, and no longer view them as disruptive.
However, introducing advertising in streaming services could also lead to consumer backlash. According to Yasa (2021), consumers are more likely to express dissatisfaction with streaming services that use advertising than those that do not. This may lead to a decrease in viewership, as consumers are less likely to use these services if unsatisfied with the experience. Consumers may also respond to ads in streaming services by using ad-blockers. Ad-blockers are software programs that prevent ads from appearing on websites and streaming services. Those consumers who are unwilling to watch ads may turn to ad-blockers to avoid them. However, this could have a negative impact on the revenue of streaming services, as they will not be able to generate income from ads if they are blocked. Additionally, Giertz et al. (2022) argue that consumers are more likely to switch to a different streaming service if the ads are intrusive or disruptive. This indicates that if consumers feel that the ads are taking away from the viewing experience, they may be less likely to continue using the service. Therefore, one potential response from consumers to the presence of advertising on streaming services is frustration. As streaming services become more commercialized, consumers may experience frustration due to the increasing number of advertisements, which can disrupt the streaming experience and make it less enjoyable.
In addition, the presence of advertising in streaming services could also have a negative effect on the user experience. According to Kweon & Kweon (2021), the presence of advertising can be distracting and can detract from the viewing experience. This suggests that consumers may be less likely to use streaming services that include advertising if they feel that the ads are taking away from their enjoyment of the content. The presence of advertising could also lead to a decrease in streaming service quality. As streaming services attempt to monetize their services, they may be tempted to reduce the quality of their content in order to make room for more ads. This could lead to a decrease in viewer satisfaction, as viewers are no longer able to enjoy the same high-quality programming they are used to. Additionally, Lee et al. (2019) argue that consumers may be more likely to view ads as intrusive if they are not relevant to the user. This indicates that if the ads are not tailored to the user’s interests, they may be more likely to view them as intrusive and disruptive, leading to a decrease in viewership. Furthermore, viewers may become increasingly jaded with the frequent presence of ads. As viewers become exposed to more and more ads, they may become desensitized to them. This could lead to a decrease in the effectiveness of ads since viewers are not paying attention to the messaging. For example, if ads are playing every five minutes or are too loud, this could detract from the user experience. Additionally, too many ads could lead to buffering issues or slow loading times, making it difficult for users to watch their favorite shows or movies. Furthermore, ads may also be targeted in ways that are intrusive or off-putting, such as targeted ads that are irrelevant to the user’s interests or that contain inappropriate content (Kweon & Kweon, 2021). All of these factors could lead to a negative user experience and discourage users from using subscription-based streaming services if they pursue advertising as a source of revenue.
Furthermore, the presence of advertising in streaming services may also lead to an increase in subscription costs. According to Gupta & Singharia (2021), streaming services that use advertising may have higher subscription costs in order to make up for the cost of the ads. This could lead to consumers being less likely to subscribe to these services if they feel that the ads are not providing them with enough value to justify the increased cost. Consumers may be less likely to subscribe to a streaming service if it contains too many ads, as they would prefer to pay for an ad-free experience. This could lead to a decrease in subscription revenue for streaming services, as consumers may opt for other services that offer ad-free content. The increased cost of subscription as a result of advertising in streaming services can have major implications. For instance, ad-supported streaming services had a significantly higher subscription cost than those without ads. This could lead to a larger financial burden on consumers, as they may be forced to pay more for services that include ads. Streaming services that incorporate ads can be more expensive than their ad-free counterparts (Yasa, 2021). This could present a barrier to access for lower-income consumers, as they may be unable to afford these services due to their higher costs. Additionally, some streaming services may also choose to increase their subscription fees in order to offset the cost of the ads, placing a further financial strain on consumers. These changes could potentially lead to a decrease in subscription revenue for streaming services, as consumers may opt for other services that offer ad-free content.
The presence of advertising in streaming services may also lead to an increase in piracy. Zhang & Zhang (2022) suggests that consumers may be more likely to turn to illegal sources of content if they are dissatisfied with the viewing experience provided by streaming services. Piracy can have a serious impact on Subsсrіption-based streaming services if streaming services pursue advertising as a source of revenue. Illegal streaming can lead to a decrease in subscription revenue, as well as a decrease in advertising revenue, as the streaming service will not be able to monetize the content viewed through illegal sources. Additionally, advertisers may be less likely to purchase ads on streaming services if they know that their ads are being viewed through illegal sources. This could lead to a decrease in the amount of revenue generated from advertising. Ultimately, piracy can have a serious impact on subsсrіption-based streaming services if they pursue advertising as a source of revenue. Additionally, research from Joa et al. (2019) suggests that consumers may be more likely to pirate content if they feel that they are not getting enough value from their subscriptions. This suggests that if consumers feel that the ads are not providing them with enough value, they may be more likely to turn to illegal sources of content. Finally, piracy could also lead to a decrease in brand loyalty as consumers become disillusioned with the service due to its reliance on intrusive ads. Viewers may become increasingly concerned about the lack of transparency when it comes to the presence of ads. Streaming services may be tempted to include more ads without being upfront about it. This could lead to a decrease in trust among viewers, as they are unaware of how many ads are included in the programming. If streaming services are able to provide content that is desirable and affordable, consumers will be more likely to pay for the content and not turn to illegal downloading (Abbasi et al., 2021). Piracy is an issue that will not be solved overnight, but if streaming services can make it easier and more desirable to pay for content, it could be a large step forward in reducing piracy.
In conclusion, the presence of advertising in streaming services will likely have a significant effect on how consumers view and interact with the service. While it is likely that increased exposure to advertising will lead to increased user engagement and higher subscription costs, it is also likely that consumers may express dissatisfaction with the ads and turn to piracy if they feel that the ads are intrusive or disruptive. As such, it is important for streaming services to consider the potential effects of advertising on the user experience before implementing any changes. As streaming services become more commercialized, it is important to consider how consumers will respond to the presence of advertisements and what measures can be taken to ensure that the streaming experience remains enjoyable for all users.
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