Hub: Free Ad-Supported Streaming Services Thriving as 21% of Consumers Looking for Cheaper Alternatives

A new report from Hub Entertainment Research reveals that affordability has become a critical factor for streaming consumers, with the importance of low pricing rising from 12% to 21% over the past year. While the average monthly spend on subscription TV remains steady at $82, the rise of free ad-supported streaming TV (FAST) platforms like Tubi and Pluto TV highlights a significant shift toward price-sensitive viewing habits. This trend underscores a growing challenge for premium streamers to demonstrate value as consumers increasingly prioritize cost-effective alternatives and bundled services.

According to a June survey of 1,600 U.S. consumers conducted by Hub Entertainment Research, the importance of low pricing when evaluating TV services has surged to 21%, signaling a "wallet-first" mentality among viewers facing inflation concerns. While the average monthly spend on subscription services has remained consistent at $82 since 2023, the maximum amount consumers are willing to pay has ticked up to $93, suggesting an acknowledgment that rising costs may be unavoidable. This environment has allowed free ad-supported streaming TV (FAST) platforms, including Tubi, Pluto TV, and The Roku Channel, to earn the highest "excellent" value scores, outperforming premium services like Netflix, Disney+, and HBO Max.

Content preferences are also shifting, with the importance of live sports nearly doubling from 6.7% to 13% as fans look for access to major events like the Olympics and World Cup. Despite the push for lower costs, premium no-ad tiers and the ability to binge-watch entire seasons remain highly valued by specific segments of the audience. YouTube Premium, in particular, received top marks for its combined video and music value proposition. Jason Platt Zolov, a senior consultant at Hub, emphasized that marketing focusing on "free" and "low price" is currently the most effective way to capture consumer interest in a crowded market.

The broader industry is seeing a slight decline in the total number of video services used, which dropped from a peak of 11.5 to 11.1 services per household at the end of 2023. However, FAST penetration is growing rapidly, with Comcast reporting that usage has more than doubled year-over-year, now reaching six out of 10 connected TV households. To combat viewer fatigue and the difficulty of distinguishing between various subscription options, media distributors are finding success with new streaming bundles. These bundles are reportedly generating strong returns by matching consumer priorities for a portfolio of premium content at a more manageable price point.