Free ad-based services increased 25% in use as a result of the crowded streaming marketplace and the financial constraints facing households during the early stages of COVID-19. However, the ad-based OTT market continues to be highly fragmented and no service has more than 7% adoption. These services offer OTT users expanded content options without the burden of a monthly fee. As the marketplace grows more competitive, these services have attracted users through desirable content. A diversified library maximizes user interest and lays the groundwork for prolonged exposure. The recent investments into original and exclusive content by leading ad-based services, like Crackle and Pluto, differentiates them as they compete for viewers.
While many leading ad-based services have seen a period of significant growth, a true leader within the field has yet to emerge. Services have developed strategic original and exclusive programming aimed at capturing users for long-term exposure.
- Amazon‘s IMDb TV service is the domestic distributor of young adult espionage series Alex Rider and the exclusive home of the sports docuseries Top Class: The Life and Times of the Sierra Canyon Trailblazers. IMDb TV will expand to include more high-profile titles such as the upcoming reboot of Judge Judy.
- Xumo formed a partnership with independent production company Bold Soul Studios to distribute original films, beginning with White Elephant. Xumo also announced a partnership with Magnolia Pictures to exclusively debut a dozen of their films.
- Roku purchased Quibi Holdings, LLC; in 2021, it plans to stream 75 shows on The Roku Channel that initially debuted on the defunct Quibi service. The Roku Channel will also debut content produced for Quibi that did not air before the service officially ceased operations in December.
- Tubi provides underrepresented artists an exclusive platform to showcase their work. February witnessed the release of the sci-fi action thriller Lazarus (led by an African-American cast) acquired from Samuel Goldwyn Films and the multiracial coming-of-age film Beast Beast from the Sundance Film Festival.
- Pluto TV’s linear channels featured select content from Viacom CBS’s premium service Showtime and the series premieres of CBS linear shows Training Day and The Equalizer immediately after their broadcast debut and availability on CBS All Access. While this content is not exclusive to Pluto TV, the concurrent availability of programming generally reserved for paid subscriptions on other services is a draw not offered by competitors.
- Crackle produces original programming regularly including films, series, documentaries, and international co-productions. At the NewFronts showcase in June, Crackle announced an additional 200 hours of new content with a focus on unscripted series such as Going For Broke hosted by Ashton Kutcher and the docuseries The History of Gangster Rap based on the bestselling book by Soren Baker.
Parks Associates data show that 34% of viewers that use ad-based OTT services cite a wide variety of programs as a reason they be use a service. Additionally, 32% of users cite good programming as why they access an ad-based service and 28% cite the availability of a specific show or series as a driver.
As ad-based services expand their content libraries with originals and exclusives, an emphasis will be on diversifying the types of content available.
It will be interesting to see which ad-based services emerge as the dominant players and major titles lead the way with significant viewer attention. Currently, viewers primarily access ad-based services as a supplement to core subscription-based OTT services. However, the significant uptick in unique content will allow ad-based services to migrate into more foundational market players.
Given that many ad-based services offer similar programming, unique programming is necessary to have users stick with one service, rather than migrate between several. Buzz-worthy original and exclusive titles are more likely than library content to generate significant increased viewership, resulting in more ad impressions and in turn more ad revenue. Original or exclusive programs on an ad-based service cements a relationship that is ideal in generating continued interest from advertisers and viewers alike.
Free ad-based services have ample opportunity to gain market share among economically challenged households during the COVID-19 crisis. These services will continue to see growth as original and exclusive content drives interest.
For more information on current players, new entrants, and trends in the OTT video services market please visit www.ParksAssociates.com
Steve is a senior analyst at Parks Associates, specializing in entertainment content and services. He brings more than 15 years experience in a variety of market research and marketing strategy roles including several in the emerging technology and media space.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceVideo staff. They do not represent the opinions of FierceVideo.