ADVERTISING’S ROLE IN THE VIEWERSHIP BATTLE.

31. 1. 2023
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The world embraced streaming during the pandemic, but as life starts returning to normal, subscription growth rates are slowing.

However, predictions for double-digit growth continue into the near future. eMarketer expects streaming ad spending to reach $10 billion by the end of 2023. The challenge for many streaming companies has been staying competitive as more media companies launch their own streaming platforms. The streaming wars gained intensity in 2019 when Disney+ entered the playing field. Netflix, Amazon Prime and HBO Max were already fiercely competing for consumer attention. Netflix, once the clear ruler of this category, saw a huge loss of 970,000 subscribers during Q2 last year. This resulted in Disney+ catching up in subscribers due to a bundle with ESPN+ and Hulu, and reaching 205.6 million in Q2. Although Netflix saw a rebound in subscribers in Q3, the company was already looking for new ways to improve profitability.

The solution for platforms like Netflix and Disney+ in staying ahead seems to be adding advertising to their platforms.

Streaming TV advertising is still growing. Advertisers are investing more in streaming as nearly 30% of TV viewing time takes place on streaming platforms.

Advertising remains a key part of TV. Platforms like Netflix originally relied on subscription fees to generate revenue. Since the number of subscriptions dropped, they launched a lower-priced ad-supported plan, including 15- and 30-second commercials and a lower subscription cost.

As subscription growth declines, streaming platforms are launching ad-supported tiers to increase profitability. The result? TV advertisers will gain more options for connecting with consumers.

Source: marketingarchitects.com
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