An analysis by BB Media on the AVOD (ad-supported video on demand) market highlights several factors contributing to its growth among Hispanic audiences in the United States. These include the increasing Hispanic population, the rise of programmatic advertising, evolving content preferences, and a desire for simplified viewing options.
FACTORS THAT DRIVE THE GROWTH OF AVOD
According to BB Media, the growth of free-with-ads platforms in the U.S. Hispanic market is driven by several key factors. As of 2024, the U.S. population is estimated at 336.8 million, with approximately 62 million, or 18.72%, identifying as Hispanic. This growing demographic is a major driver for the expansion of free-with-ads services.
One significant factor is the rise of programmatic advertising, which allows for targeted messaging based on specific audiences and their content preferences. For the Hispanic market, this means ads can be more effectively tailored, enhancing their relevance and impact.
Additionally, the preference for content in native languages and the growing availability of such content on free-with-ads platforms boost adoption rates. The phenomenon of “fatigue” where viewers are overwhelmed by too many choices, makes curated, ad-supported content like FAST Channels increasingly attractive. These channels simplify the viewing experience, addressing the frustration of too many options.
The trend of consumers subscribing to multiple services but being unwilling to pay for more, further drives the demand for free, ad-supported options. FAST services meet this need by offering content at no cost while generating ad revenue, and appealing to budget-conscious viewers.
BB Media points out that in summary, demographic growth, targeted advertising, content preferences, and the desire to simplify viewing choices contribute to the expanding role of free-with-ads platforms in the U.S. Hispanic market.
HIGH ENGAGEMENT WITH FREE-WITH-ADS PLATFORMS
According to BB Media, the free-with-ads services penetration by ethnic groups reveals significant insights into the viewing habits of different communities. Hispanic or Latino and African American households show a high engagement with free-with-ads platforms, with a penetration rate of 84%. This is notably higher than the 78% penetration among White households and close to the 85% observed in American Indian or Alaskan Native households.
However, the highest penetration rate is seen among Asian or Pacific Islander households at 88%, indicating a strong preference for free-with-ads services across diverse ethnic groups. While growth opportunities might appear limited, FAST Channels still have potential, as 51% of Hispanic households reported that in the last three months have used them to watch online content.
THE MOST POPULAR GENRES ARE DRAMA, COMEDY AND HORROR
BB Media analyzed the popularity of Hispanic content in the US. During 2024, the most popular Hispanic series were Yo Soy Betty, la Fea (1999) -due to the Prime Video’s sequel Betty, la Fea: La Historia Continúa-, El Juego de las Llaves (2019) and Montecristo (2023), La Hija del Mariachi (2006) y El Chavo (2006). Regarding movies, the ranking includes Tengo Ganas de Tí (2012), El Infierno (2010), No Manches Frida (2016), Radical (2023) and El Cuco (2023). For the content buyers, it’s noteworthy that Mexico stands out as the leading producer of popular titles, followed by Colombia and Spain.
Betty, la Fea: La Historia Continúa
Overall, the most popular genres were drama, comedy, and horror. In this matter, the free-with-ads services catalog is almost spot-on: the most offered genres are drama (28%), comedy (15%), and documentary (9%). Mexico (1.434), the U.S. (187), Spain (186), Argentina (144), and Colombia (118) are the leading producers of this type of titles available on free with ads platforms. In addition, Tubi, ViX, and Canela.TV are the platforms that offer the most Hispanic content.
THE VALUE OF TARGETING THE US HISPANIC MARKET
BB Media points out that advertisers have increasingly recognized the value of targeting the US Hispanic market through free-with-ads platforms. They have tailored their ad content to be culturally relevant and have capitalized on the higher engagement rates.
Thus, understanding the audience is crucial. BB Media’s demographic analysis reveals that 29% of Hispanic households who choose to watch content on free with ads platforms, have adults aged 25 to 34, 24% are aged 16 to 24, 14% are aged 35 to 44, and 13% are aged 55 or older. Additionally, a significant majority of viewers who watch Hispanic content, 61%, are women.
PLATFORMS MUST INVEST IN LOCALIZED CONTENT
BB Media señala que free with ads platforms face significant challenges in engaging U.S. Hispanic audiences due to the need for culturally relevant and linguistically appropriate content, competition from other streaming services and traditional TV, and the necessity for targeted, culturally sensitive advertising.
They point out that cultural relevance is crucial for the success of the content targeting U.S. Hispanic viewers within free-with-ads platforms because it fosters a strong emotional connection and loyalty by reflecting their experiences, traditions, and values. “Authentic representation enhances engagement, differentiates platforms from competitors, and taps into a niche market seeking culturally resonant content. It also builds trust and credibility, showing respect for the audience’s cultural identity. Providing content in preferred languages and incorporating cultural nuances improve accessibility and enjoyment, while targeted, culturally relevant advertising drives engagement and brand affinity. Overall, cultural relevance ensures sustained engagement, a loyal viewer base, and long-term growth for free with ads platforms.”
Additionally, issues such as varying Internet access, user interface accessibility, building trust and brand loyalty, and gathering accurate audience insights further complicate engagement efforts.
To overcome these challenges, platforms must invest in localized content, offer flexible language options, partner with Hispanic creators, utilize targeted marketing, and actively seek and incorporate user feedback to create a more personalized and appealing viewing experience.
According to BB Media, streaming platforms should be more strategic when incorporating advertisements. “It is recommended that the ads align with the plot and type of content”. BB Media’s analysis reveals that 76% of users prefer ads included before the content plays. Additionally, 41% state that their experience is not affected by the ads.
One of the challenges is maintaining a high-quality catalog with content that attracts users, especially since the main subscription platforms are producing their originals. BB Media adds that among the 100 most popular series in 2024, 58 are exclusive to a single platform. “Similarly, 22 of the 100 most popular movies are also exclusives. However, free-with-ads platforms could differentiate themselves by including movies and series featuring actors who are well-received in the Hispanic community,” mentioned.
BB Media analyzed which actors had the highest popularity ratings in Hispanic titles. The top 10 includes Argentinians Agustín Pardella, Esteban Bigliardi, and Matías Recalt, Uruguayan Enzo Vogrincic, Spaniards Pedro Alonso, Begoña Vargas, Joel Sánchez, Julio Peña, and Michelle Jenner, and Mexican Samantha Siqueiros.
HISPANICS WATCH 2 FREE-WITH-ADS PLATFORMS AND 3.7 SVOD
Regarding how viewing patterns differ between Hispanic audiences versus the general population, BBM Media indicates that in Hispanic households, the average time spent watching free-with-ads platforms is 10.7 hours per week. Among these viewers, 34% watch them daily, 25% do so more than once a week, 23% watch once a week, and the remaining 18% watch free with ads platforms once a month or less.
BB Media’s analysis reveals that 68% of the Hispanic subscription services users in U.S. prefer a more affordable streaming plan, and they would rather save money even if the commercials interrupt the content.
When it comes to the habits of Hispanic users, BB Media’s data reveals that, on average, they use 2 free with ads platforms and 3.7 subscription services. This is relatively low compared to the national average, where users typically access 8 platforms, with 4.45 being subscription-based.
The Hispanic community in the U.S. has diverse preferences when it comes to genres, with comedy leading the pack at 65%. Action follows closely at 58%, while drama captures the attention of 54% of the audience. Adventure and science fiction also rank highly, with 49% and 42% respectively. In line with the top five, horror is enjoyed by 42% of viewers, and crime by 38%. Animation and romance have their dedicated followers at 32% and 29%, while sports attract 27%.
STRATEGIES TO ATTRACT & RETAIN VIEWERSHIP
Regarding strategies to retain audiences on platforms with ads, BB Media points out that in pricing strategies, FuboTV and YouTube TV, for example, offer plans specifically dedicated to Latino audiences, priced at US$32.99 and US$34.99, respectively. These plans include a variety of Spanish-language channels and content, directly catering to the preferences of Hispanic viewers.
Additionally, platforms like DIRECTV Stream (US$15.99), Hulu (US$4.99), and Sling TV (US$5) allow users to add content in Spanish to their existing plans, providing flexibility for users to customize their subscriptions without having to change services.
For BB Media one successful approach for free with ads platforms is forming alliances with telecommunications companies. For instance, ViX Premium, a platform dedicated to Spanish content owned by TelevisaUnivision, has recently partnered with Verizon to offer its subscription plans through this company, leveraging Verizon’s extensive customer base to reach more Spanish-speaking viewers.
EVOLUTION OF THE ADVERTISING SPEND ON AVOD PLATFORMS
BB Media mentions that initially, streaming platforms focused heavily on pure subscription plans. “To date, there are over 150 platforms that offer subscription-only options, which ensures a stable and recurring income free from advertising interruptions. But as the market expanded, there was a clear need to capture a broader user base. To address this, platforms diversified their business models. Now, there are over 20 platforms with ‘Subscription with Advertising’ plans and more than 180 offering ‘Free with Advertising’ access. These options not only made content more accessible but also created new monetization avenues tailored to different economic capacities of users.”
Between 2020 and 2023, BB Media saw significant growth in ad-supported plans. “However, in 2024, we’ve hit a turning point with clear signs of market saturation. This is evident in the declining adoption rates of these plans, which suggests that platforms need to rethink their strategies to keep these plans competitive and attractive. In the U.S., the greater savings compared to other regions make ad-supported plans particularly appealing, giving users a strong incentive to opt for these.
They add that it is important to mention that one of the challenges is how to fill advertising spaces. “The ad breaks are not fully occupied, so there are still more spaces that can be sold. Brands are yet to gain confidence and invest in platforms. To achieve these goals, the platforms must be transparent about their viewership numbers,” said BB Media.
HOW AVOD PLATFORMS MEASURE THEIR ADS EFFECTIVENESS
BB Media noted that free-with-ads platforms can measure the effectiveness of their advertising campaigns targeting the Hispanic market by analyzing audience demographics, viewership patterns, and engagement metrics.
“They might track ad visibility and performance, such as clicks and in-platform purchases, to gauge impact. Transparent reporting and clear policies on metrics can potentially build trust with advertisers, which might lead to more partnerships and higher ad-breaks sales. Additionally, depending on their interfaces, the free-with-ads platforms could use surveys to assess changes in brand perception and awareness. By combining these approaches, they could gain insights into how well their ads resonate with the Hispanic audience and make data-driven improvements,” they concluded.
