Jonathan Coe’s Middle England, third volume of his Birmingham trilogy of novels that begins in Britain’s West Midlands in the mid-1970s era of pub bombings, plant closings, and prog-rock, picks up the story in the early 2010s. Gathered with his recently widowed father and sister in his childhood home, middle-aged Benjamin Trotter unearths a DVD of Morecambe & Wise Christmas specials. He fondly recalls Christmas 1977, when his family had sat down to watch the comedians’ last BBC show along with seemingly most of the country. “Twenty-seven million people used to watch this,” he says.
“Because we only had three channels,” his sister replies. “And there was nothing else to do.”
Long gone are the days of such limited broadcast entertainment options in most countries, yet we remain nations of cord-cutters. Whether we swore off OTA because of monthly costs, fixed schedules, or intrusive advertising, OTT has largely won out because viewers clearly wanted something else.
For several years, that “something else” seemed to be SVOD. Netflix’ first-ever reports of subscriber loss and a 62% decline in market valuation in the first two quarters of 2022 offer two obvious reasons why the company is teaming with Microsoft to develop an ad-based model to augment its subscription base. The “Netflix model” may look a lot more like the “Hulu model” in the years to come.
Meanwhile, AVOD and FAST services have become OTT’s fastest-growing segments. But is the return to ad-interrupted viewing a signal of consumer resolve or simply resignation?
In a recent Streaming Media webinar on OTT Monetization, EZDRM COO Olga Kornienko argued that the drift back toward ad-based models has been dictated by business concerns, not viewer preferences. As she notes, it’s not necessarily “what consumers would choose, given a choice.”
According to a just-published survey by global market research firm Appinio, 53% of British respondents (and 61% of Gen-Z’ers) said they would prefer not to watch ads (no surprise), but 51% would not pay extra to avoid them.
While this migration to AVOD and FAST certainly doesn’t signify a return to the three-channel doldrums, acclimating to the escalating ad load must seem like a dispiriting step backward for many avowed cord-cutters.
Netflix's ad-supported tier and cost-of-living crisis place uncertainty on peoples' willingness to pay more for streaming service subscriptions