20% of U.S. broadband households use ad-supported OTT services

20% of US broadband households use ad-supported OTT services, and 15% use freemium services

DALLAS — Parks Associates OTT research finds 20% of US broadband households currently use an ad-supported OTT service and 15% use a “freemium” service, placing these offerings in a strong second place, behind OTT subscription services, among business models.

“There is no clear market leader in the ad-supported and freemium OTT space, with Pluto TV, The Roku Channel, Tubi TV, Peacock, and Crackle all scoring relatively similar adoption rates,” said Steve Nason, Research Director, Parks Associates. “The newest offering, NBCUniversal’s Peacock, does have the reach, content, and profile to disrupt this area, which could further boost usage of ad-based and freemium OTT among US households.”

Parks Associates research finds US broadband households in Q1 2020 report spending an average of $16 per month on OTT video service subscriptions, behind $89 per month on pay-TV services. Consumer spending has been shifting toward OTT services and subscriptions as more households cut or trim their pay-TV services.

“A prolonged economic contraction could drive households to reduce pay TV spending more, while also scrutinizing their OTT service stacks,” Nason said. “Ad-based services will establish a large role within the today’s OTT service space as consumers look for affordable entertainment options.”