Parks Associates’ latest Video Services Consumer Insights Dashboard underscores the continued transformation of the U.S. video market, with 56 million internet households—46% of the total—now classified as Cord Cutters. Additionally, 12% of U.S. internet households have never subscribed to traditional pay TV, a segment known as Cord Nevers.
The decline of traditional pay TV and the rise of digital alternatives aren’t just about cost-cutting. Consumers are shifting toward services that offer greater flexibility, convenience, and affordability. This has fueled the rise of ad-supported video-on-demand (AVOD) and free ad-supported streaming TV (FAST), as subscription-based platforms increasingly experiment with tiered pricing to maintain and grow their subscriber bases.
Ad-Supported Streaming on the Rise
One of the most telling insights from the Video Services Consumer Insights Dashboard is that ad-supported tiers now dominate the major subscription video-on-demand (SVOD) landscape. As of Q3 2024, 59% of subscriptions across the top eight SVOD services are for basic, ad-supported tiers:
- MAX (formerly HBO)
- Netflix
- Disney+
- Discovery+
- Paramount+
- Prime Video
- Hulu
- Peacock
Consumers are increasingly choosing these lower-cost, ad-supported plans as inflation and continued subscription price hikes force them to rethink their entertainment spending.
“Consumers are worn down from continued spending increases in streaming, while years of high inflation are driving consumers to pare down accordingly,” said Jennifer Kent, Vice President, Research, Parks Associates. “This only intensifies the competition among streaming vendors and will fuel more growth of subscription tiers with ads and free ad-based services.”
The Cord-Nevers Opportunity
For streaming services, Cord Nevers represent both a challenge and an opportunity. This group has never paid for traditional TV but is engaging with streaming platforms in ways that challenge conventional monetization models.
“Cord Nevers represent a unique opportunity for streaming providers,” said Kent. “By definition, this segment of the market has not paid for traditional pay TV, but streaming services have found a way to monetize a segment that has not previously valued subscription video or has grown up in a streaming-first market, with different conceptions of what subscription video should be.”
This group is accustomed to free or low-cost video options, making ad-supported streaming a particularly attractive entry point for services looking to expand their customer base.
The Future of Streaming Monetization
As streaming services continue their march toward profitability, hybrid monetization strategies—offering both ad-free and ad-supported plans—are proving essential. The data from Parks Associates reinforces a growing reality: ad-supported streaming is not just a temporary trend but a long-term shift in consumer preferences.
With AVOD and FAST services gaining traction, the industry is entering a phase where price-conscious consumers dictate the evolution of streaming monetization models. Those who successfully balance affordability with premium content will have the best chance of retaining and growing their user base in an increasingly competitive market.
