From Cord Cutters to Device Cutters: TV Tech is Changing the Face of Streaming Advertising

The release of Handmaid’s Tale Season 4 this week reminded me that streaming content is truly a living, breathing entity.  My social feeds buzzed with the news of the release—some of this buzz was simply around where/how to watch. Watching a TV show has become a maze that consumers sometimes struggle to navigate.  The complexity starts with the tug of war between TV Manufactures, connected devices, and the publishers.  It’s tough to tell who the winners are as streaming engagement continues to grow.

The “Big” Picture

We know that the pandemic pushed viewers to streaming.  Consumers are looking for big screen streaming viewing. We’ve heard of cord cutters, but big TVs are driving people to “cut the device”.  They no longer need their Fire Stick or Roku because TV manufactures have created their own operating systems so they own their own data.  And when it comes to monetization, isn’t it all about who controls the data anyway?  By 2024 it is likely that 60% of global consumers will own smart TVs, while 40% will still be using digital media adaptors and other devices.  TV Manufactures have an opportunity to own the user experience, build an ad business, and increase market share.  No wonder why those TVs are so cheap these days!

Streaming Publishers Wars

For publishers, it is paramount to attract subscribers to their platforms.  Since Q1, streaming publishers have nearly doubled their social media presence. In Q1 2021, HBO Max takes the prize for most growth.  Netflix subscription growth is quickly decelerating as we enter a world of streaming fragmentation.

Streaming platform leaders in new subscriber growth in March 2021:

  • HBO Max 14.4%
  • Prime Video 13.2%
  • Paramount+ 11.8%
  • Disney+ 11.6%
  • Hulu 10.6%

Let’s Be Real

The rise of AVOD (advertising-based video on demand) is going to be a big game changer for brand budget allocation. We need scale, in premium content, with precise audience targeting, in the right geography.  Oh wait, and we need that big screen.  These requirements make up the holy grail we are looking for within our streaming strategy for our clients.  HBO Max is set to launch an ad-supported tier in June and hopefully more premium content providers will follow suit.  Consumers are willing to watch ads if it will reduce streaming costs.  With all the packages, bundles, and content chasing, developing more AVOD options will help both the consumer and the brands looking to reach those consumers.

This post was written by Executive Vice President, Amy Ward.

 

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