Some 72% of UK SVOD subscribers said they do not find any form advertising on subscription video services acceptable, according to research consultancy Differentology.
Based on a survey of more than 2,000 UK consumers, Differentology found that 23% of Netflix subscribers said they would upgrade to an ad-free premium model, should Netflix begin to show ads.
A 39% share of the ‘VODyssey’ study respondents said they would either cancel their subscription or switch to another paid service that did not carry ads.
“While advertising on SVOD services is currently not seen as acceptable by the majority of consumers, 43% of those who expressed a preference agreed that they accepted and enjoyed advertising on video-on-demand and catch-up services, such as ITV Hub,” said Dan Brilot, Head of Insight at Differentology.
“Models for future SVOD services need to understand legacy relationships with existing broadcasters and their ‘permission’ to advertise on their VOD platforms.”
The research noted there is still “plenty of room for growth” in the SVOD space, with 37% of current subscribers stating that they are likely to take up another service in the next six months, 65% of whom said this would be in addition to their existing service.
It also said there is “incredibly low churn” in the market, with 66% of SVOD subscribers claiming to have never cancelled their subscriptions while 32% said they wait less than three months to re-subscribe to the same platform.
“The mix of low-rolling monthly subscriptions, in addition to episodic content, means SVOD has unusually high levels of loyalty as a category, with one in six claiming to always go to an SVOD service first when deciding what to watch.
“The figure rises significantly for 16-to-19-year-olds, with over half (53%) never going to live TV first, while 17% of the age groups claim the number of paid SVOD subscriptions in their household will increase over the next three years.
“New entrants, such as BritBox, seem set for success, provided the price point is in line with current SVOD providers.”