Millennials embrace ad-supported streaming, new study finds

In recent years, the broadcast and media landscape has seen a significant shift with the advent of streaming platforms, posing new opportunities and challenges for advertisers.

A recent study by Samba TV in collaboration with global research firm HarrisX has provided fresh insights into the millennial demographic, a group at the forefront of this transition from traditional cable to online streaming platforms.

The study, “Guide to Targeting Millennials,” took a deep dive into the streaming behaviors of over 72 million U.S. adults within this age group, who collectively hold more than $2.5 trillion in spending power. This demographic has shown a distinctive openness toward ad-supported video-on-demand (AVOD) platforms, a trend that contrasts older generations.

According to the data, 8 out of 10 millennials stream TV shows, with a whopping 84% of them using Netflix.

The study also found that 21% of millennials with a Netflix subscription opted for the ad tier, with 68% of this subset joining the platform after introducing a lower-cost ad tier. Additionally, 68% of millennials have a streaming subscription that shows ads, revealing a notable inclination towards AVOD and free ad-supported streaming television (FAST) models.

• 8 in 10 millennials stream TV shows, with 84% of those streamers using Netflix.
• 73% of millennial parents subscribe to a streaming service for just their kids.
• 68% of millennials have a streaming subscription that shows ads, more than any other generation.
• 21% of millennials with a Netflix subscription signed up for the ad tier, with 68% of this group subscribing to the platform after the lower-cost ad tier was released.
• 68% would be likely to change their streaming subscriptions if a current one released a cheaper version with ads.
• 85% look at a mobile device while watching TV.
• 72% would watch live events on top SVOD and AVOD platforms if they were offered.

Ashwin Navin, Samba TV Co-founder and CEO, remarked, “Millennials are the generation that grew up on cable and were first to cut the cord, and have revealed themselves to be a core audience on AVOD and FAST platforms.”

He added that this demographic’s willingness to view ads on streaming platforms presents a golden opportunity for advertisers. By adopting an omniscreen strategy, advertisers can effectively reach over 20% of the U.S. population, a group with greater spending power than retiring baby boomers.

This shift comes at a time when major streaming platforms like Netflix and Amazon are introducing advertising tiers to their services. Despite millennials being the pioneers in cutting the cord with traditional cable TV, their acceptance of ad-supported streaming models highlights a potential paradigm shift in the advertising domain. This willingness opens up new avenues for advertisers to connect with this influential demographic across multiple platforms, ensuring a more extensive reach and potentially better ROI on advertising spend.

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The findings of this report could serve as a roadmap for advertisers aiming to recalibrate their strategies to better align with the evolving viewing habits of millennials. As the industry continues to evolve, understanding the preferences and behaviors of key demographics will be crucial for advertisers and broadcasters alike to stay ahead in the game.