August 10, 2023 SIX TOP STREAMING FACTS
Staying current with the streaming TV ecosystem is a challenge. The following are six key highlights from the most recent industry news.
Turn: Streaming has turned the tables on linear viewing and ad spend. Time spent viewing streaming surpassed linear TV for the first time in 2023, with Ad-Supported Video On Demand (AVOD) at 50% of streaming viewing time. Ad spend on linear will reach $61 billion this season, a $5 billion cut from YA. By contrast, US CTV ad spend will hit $26 billion. By 2025, streaming spend will surpass linear spend. And by 2027, streaming will constitute a whopping 68% of total ad spend.
Churn: 31% of streaming subscribers are downgrading to a less expensive Free Ad-Supported TV (FAST) version. And 59% of consumers are willing to cancel a subscription after binge-watching desired content.
Yearn: 96% of US TV viewers multitask with another device while viewing, often while quenching their shopping thirst. After seeing a streaming ad: 39% searched online; 37% visited an advertiser’s website; 17% later visited the store; and 16% bought a product advertised. And once Amazon launches an ad-supported service, advertisers will happily access the most valuable consumer buying history data.
Learn: The streamers have a painful learning curve, struggling to do the following: curb licensing fees and library content spending; entice customer acquisition; raise subscription prices; and generate ad revenue – while limiting subscription erosion and revenue loss.
Spurn: Content is king, but the Writers Guild of America (WGA) cut the supply line by striking in May, unwilling to be low-paid pawns while streamer CEOs earn over $200 million per year. The writers decried the low pay, no residuals, and lack of job security. It’s a showdown of streamers bleeding subscriptions for lack of new content, versus writers needing to pay their mortgages.
Burn: After Apple, Amazon and YouTube scooped up NFL and MLB rights, ESPN set off alarm bells, disrupting the cable industry by announcing it will sell its channel directly to cable cord-cutters as a subscription-streaming service, migrating ESPN to direct-to-consumer (though still offering the cable channel).
As the streaming industry matures and seeks profitability, it will continue growing its share of viewing and ad dollars. Watch for other cable networks to adopt ESPN’s playbook, for the streamers to continue developing augmented interactivity, and for the agency mavens to push for unified audience measurement standards.