TV is being redefined, moving at an accelerated speed toward convergence. Unsurprisingly, that shift is being driven by streaming. According to new data, 72% of homes will be cord-cutters by the end of 2025, a drastic increase from 53% in 2022.
As audiences change their viewing behavior, media companies are evolving to meet that growing demand. An unprecedented number of streaming platforms and business models (like ad-supported video on-demand, subscription video on-demand, and free ad-supported TV) continue to emerge.
So, when it comes to advertising, it’s not as simple as just including streaming in media marketing plans. There are various trends happening right now within streaming that advertisers need to be aware of. It could make the difference between a positive ROI or a wasted ad budget.
YouTube stakes its claim with TV watchers
One of the most interesting developments in the television industry has nothing to do with any of the big streaming services or major broadcast and cable networks.
It has to do with YouTube.
YouTube (the original video-sharing website, not YouTube TV) is now seeing nearly half of all viewing happening on an actual television set, as opposed to a smartphone, laptop or tablet.
The platform leads all other streaming services, even Netflix and Hulu, in share of time spent viewing. Additionally, YouTube recently increased 1.5% in viewing, while others stayed flat or decreased altogether.
It’s a sign that the younger generation does not necessarily concern themselves with the provenance of a video program so long as they find it engaging and entertaining. And that the line between what is considered “long form” (usually said to be at least 20 minutes) and “short form” is an artificial distinction; one that may be useful for selling advertising but does not reflect the way viewers watch TV.
Consequently, the company recently announced that it is introducing 30-second, non-skippable ads to its videos. This replaces the two 15-second ads that have long been running on its platform. By enabling ads traditionally associated with television, YouTube is revealing its desire to be seen as a TV platform and becoming more attractive for advertisers.
Sports are on the move and fans are likely to follow
Additionally, sports—long seen as the cash cow of broadcast TV with its lucrative and plentiful advertising rights—is slowly but surely shifting to streaming, too.
Amazon’s NFL rights deal opened the floodgate, which now includes YouTube airing the NFL’s Sunday Ticket, Apple airing MLB games and massive speculation as to which streaming services will get a piece of the impending NBA rights deal.
Viewers often don’t care where their video content comes from. If they’re watching and they find it to be engaging and relevant, then it’s TV.
These deals are exceptionally pricey, so how effective they are at attracting new subscribers will certainly be a question that industry players will be watching closely.
And this isn’t just relegated to national leagues. Most regional sports networks (RSNs) are planning to move their operations to streaming as well.
This is yet another example of how the lines between different types of content delivery are becoming blurred. Streaming, which was originally the home of video on-demand (VOD) content, is now hosting live sporting events.
This includes live ad-supported sporting events, too. While Apple and Amazon do not run ads on Apple TV+ or Amazon Prime, respectively, they do run ads on their live sporting events. Not only because watching ads is more entertaining than listening to the announcers prattle on during time-outs, but mainly because contracts with the various leagues require it.
Even ESPN, the last flagship of cable-based sports broadcasting, appears to be lagging. Reports in the Wall Street Journal claimed that Disney has plans to launch ESPN as a full-fledged streaming service. (The current ESPN streaming service, ESPN+, mostly shows shoulder content and smaller leagues. The new platform would allegedly have all the main ESPN cable channels programming on it.)
That doesn’t mean that ESPN plans to shut down its cable operation. Disney, the parent company, will operate both, at least for the foreseeable future.
So, what should marketers make of these blurred lines between digital video, cable and streaming?
Audiences are platform agnostic
Viewers often don’t care where their video content comes from. If they’re watching and they find it to be engaging and relevant, then it’s TV. They’re less concerned whether it came from YouTube, a streaming service or from a cable network, unless of course you are relegated to an ad-pod pool with seven laundry commercials stacked back-to-back.
As a result, advertisers need to be able to reach viewers on whatever content they’re watching and not assume that because they have reached them on one platform, they should disregard the necessity of reaching them on other platforms.
Successfully reaching viewers where they are is crucial in today’s hybrid market, where the definition of TV has become increasingly ambiguous. And while streaming is taking a greater share of viewership, linear isn’t disappearing tomorrow.
The streaming audience will grow, and the linear audience will shrink. But linear and connected TV are actually quite complementary. So, as viewers take a hybrid approach to watching television, linear and CTV should be used together to optimize advertising efforts.
In the end, this serves as the most effective defense against a continually evolving ecosystem: A high degree of flexibility and adaptability on an ongoing basis will facilitate success for advertisers.
