FAST Opportunities in Slow Economies: How Consumers Are Cutting Costs, Not Content

It’s no secret, people are worried about the future, and with good reason. Economic uncertainty is rising; 4 in 10 forecasters think the odds of an economic downturn are more than 50% (USA Today). While companies cut costs and revise projections, everyday consumers are making adjustments of their own.

Historically, tough times have driven people toward entertainment. During the Great Depression of the 1920s Hollywood thrived by offering a new form of escapism. More recently, the pandemic drove massive adoption and growth of streaming services as live events were cancelled across the globe.

But now, as we enter a period of economic uncertainty, how will streaming hold up as consumers tighten their budgets? How will advertisers reach an audience that is more cost-conscious than ever? In April, LG Ad Solutions conducted a survey of 494 US consumers to find out.

A Tale of Two Price Hikes

Consumers are feeling cost increases from both sides: the economy and rising subscription costs. As economic uncertainty increases the cost of essentials like groceries and utilities, entertainment like streaming services subscription fees are also going up. 

Faced with this reality, consumers are making sacrifices, and streaming services are on the chopping block. In our survey, 58% of respondents said that they will cut back on the number of streaming service subscriptions due to the potential economic uncertainty. At the same time, 61% said they would cut back due to the rising cost of streaming services. 

In fact, when asked about important factors in deciding which streaming services to keep, price was far-and-away the #1 issue, with 70% of respondents citing it as their top consideration. The next most important factor? Content library, trailing behind by 32 points.

That doesn’t mean people are giving up on entertainment. In fact, 43% say they’ll be watching more free, ad-supported streaming services, and 24% say they already mostly use free streaming services. 

This consumer adoption of FAST (Free, Ad-supported Streaming TV) has been a long time coming – we’ve actually talked in detail about this in our yearly Big Shift studies. But now, major studios are taking notice. Lionsgate, A+E Global Media, BBC Studios, NBCUniversal, and Sony have all launched FAST Channels on LG Channels.

Put simply, FAST channels are stepping up at exactly the right time to focus on the two things that matter most right now: cost and content. People are realizing they don’t have to sacrifice great entertainment to save money. In a moment when every dollar counts, that’s a win.

We Have Beyonce at Home

Economic uncertainty or not, there is no denying that streaming has become the go-to place for pop culture moments.

Last year, Netflix streamed its first ever Christmas NFL games. To mark the occasion, draw audiences away from their families, and stand out from Amazon Prime’s Thursday Night Football, Netflix tapped Beyonce to headline their halftime show, calling it the Beyonce Bowl. And by all accounts it was a complete success, as an estimated 27 million people tuned in to watch (CNN).

But now, five months later, it seems the streaming success isn’t translating to her live events. Her COWBOY CARTER tour has been off to a rough start, with many venues on the dusty tour trail not selling out, even as tickets fall to historic low prices (NBCNews). And it’s not just Beyonce that has a problem. Coachella was reported as having problems selling out their infamously famous and instagrammable two-weekend festival. And for those who did buy into the hype, over 60% of attendees used the festival’s buy now, pay later option (Billboard), a sign of how expensive it is to attend live events.

So, what’s going on? According to our survey, 66% of respondents say they’re more likely to stream live events than buy tickets to attend in person. In a separate survey of LG Channels users, 75% are interested in watching live events on the app. With rising ticket prices and endless streaming options, we may be witnessing the end of the FOMO economy.

What This Means for Advertisers

When asked, 71% of our respondents said they’d find it helpful to receive ads on their streaming services that include product offers and vouchers, and we’ve already started seeing advertisers leaning into that opportunity. 

During March Madness, Ford launched its “Employee Pricing For All” campaign, giving everyday consumers access to the kind of pricing usually reserved for Ford employees. The results were immediate, with a reported “double-digit increase” in foot traffic and Ford even extended the promotion a month beyond its original June 2nd end date due to strong demand. Clearly, everyone’s thinking about price.

With today’s advanced CTV capabilities, advertisers can run campaigns that are timely, geo-targeted, demographic-specific, and measurable in real time. To make your ad dollars work harder, it’s essential to meet viewers where they are—and increasingly, that’s on free, ad-supported platforms like LG Channels.

Want to learn more about connecting with the conscious consumers in your target audience? Contact us here.