The State of DTC Subscription Services: What Advertisers Need To Know

At Roku, we always thought that 2020 would be the start of the Streaming Decade. As America’s #1 TV streaming platform, we’ve been able to watch the growth of new subscription video services and the way that streamers are looking for curated content and personalized experiences and recommendations. That’s why some streamers choose direct-to-consumer (DTC) brands, too, for curated subscriptions of everything from beauty and shaving products to pet supplies and alcohol. 

It’s a similar mentality: people want the convenience of curated packages, whether they’re trialing a new streaming channel or a DTC brand. 

We wanted to find out more about how streamers think about DTC subscription services and how their habits have shifted, so we conducted a survey o f1,522 Roku users to find out more about the state of DTC subscription services among streamers in 2020. Here’s what we found: 

1. 4 in 5 Roku Users Don’t Yet Use DTC Subscription Services

While social and display are crowded and often expensive spaces for DTC brands, our survey found that streaming is still an emerging market for DTC brands. We found that 17% of Roku users are currently subscribed to a subscription service. The user base skews younger, with 67% of those consumers between ages 18-44. Women, parents, and households with income $75,000+ are more likely to say that they are currently buying from a DTC brand. 

For TV streaming advertising, there's a huge opportunity to target specific audiences for specific products. The awareness of most DTC brands across streamers is still relatively low, but with the right ad campaign, you can connect with streamers who are already actively looking for new DTC services.  

2. Food & CPG are Top Categories

While many different potential services are popular, we found that streamers tend to be most interested in brands that that help with meal prep, CPG purchases, and lifestyle goods. When we asked respondents whether they were likely or neutral to sign up for specific categories for DTC services:

Once streamers have started subscribing to a service, they’re more likely to look for others, too –61% of Roku users who were already subscribed to at least one delivery service said they were very or somewhat likely to sign up for another within the next six months. This is not a winner-takes-all category. If marketers can prove that their brand can help fill a specific need, consumers will be interested.

3. DTC Subscribers Look for Value & Convenience

DTC subscribers who we surveyed are looking for two things above all: value and convenience. They count on subscription services to simplify their day-to-day lives and are most likely to be evaluating price, free trials, and how it fits their lifestyle.

When we asked respondents which factors influenced their decision to use a delivery subscription service:

When advertisers want to create an ad campaign that really resonates, these findings show that it’s important to showcase how the subscription service can help with a subscriber’s lifestyle–and deliver value, too. 

4. More Roku Learn About DTC Subscriptions via Streaming & TV than Family & Friends

DTC marketers often depend on a digital-first strategy that focuses on performance marketing. That’s made channels like social media and display ads especially attractive, because it’s easy to spend an ad budget and track results. Advertising on TV streaming, with sophisticated attribution and identity solutions, can offer the same level of precision. 

When we asked respondents how they learned about DTC subscription services:

For DTC advertisers, this means that a largely untapped audience is already learning about subscription services across streaming services and streaming advertising. When one DTC brand ran a TV streaming ad campaign, they saw significant conversion-compared to the control group, viewers exposed to the streaming ad campaign were 328% more likely to install the brand’s mobile app and had 5.5x the purchase rate. 

The Subscription Economy

The results here show an appetite for subscription services among streamers. This makes sense, since much of streaming itself is founded on subscription behavior. Viewers are accustomed to signing up and subscribing for curated content and leading DTC brands have already started building sophisticated ad campaigns with streaming at the center.

As audiences keep turning to streaming instead of linear TV, they’ll spend more time watching ads across streaming channels. By engaging the streamers who are most likely to trial and subscribe to a DTC service, marketers can grow their customer base, too – across every screen.

Learn more about steamer-first marketing here.