Streaming television is quickly moving to front and center as one of the fastest growing media types. In the last year, the number of over-the-top (OTT) households—those watching internet-connected television—has risen over 20%, as have the total number of hours spent watching OTT, according to a report from Comscore. That number amounts to 82 million households, streaming an average of 100 hours of content in a period of one month.
Streaming’s Internal Conflict
In 2020, streaming became the most common way for Americans to consume video. More households now use a streaming service than subscribe to cable (which continues to diminish by a rate of 4% to 5% each year). But what is beginning to emerge in the streaming arena is a tug-of-war between subscription-based video on demand (SVOD) and ad-supported video on demand (AVOD).
SVOD, for a long time, has dominated the streaming landscape. Platforms like Netflix, Amazon, Hulu, Apple TV+, and HBO Max were where the best programming could be found, especially a considerable amount of original programming. But AVOD has begun to move into the space, creating its own original programming, to draw new audiences in. And with subscription prices rising, the average household, which often has as many as four SVOD services, is experiencing subscription fatigue. As a result, AVOD is growing rapidly, much faster than SVOD, with only about 3% percent difference between AVOD and SVOD households, according to a recent Comscore report.
According to a report from market research firm eMarketer last fall, nearly 128 million people were estimated to be watching AVOD in 2021, a rise of roughly 18% year-over-year, marking the first time that AVOD viewers made up more than half of all digital video viewers in the United States.
A Boon to Advertisers
Advertisers are noticing. The predicted year-to-year growth in CTV/OTT advertising spend in 2022 is 34% (versus the 7.4% for national broadcast and cable ad spend). A total of 66% of advertisers plan to increase their CTV (connected television) advertising budgets, according to a recent report. And programmatic advertising is the most cost-effective way to buy advertising on streaming television. Programmatic allows the advertiser to tailor their message specifically to their audience. It has been described as the right product using the right message and sent to the right person.
Streaming is no longer the wave of the future. It is here now and ready for you.
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