The CTV Landscape Looks Great, Especially for Free Ad-Supported TV

40% of US adults report having increased their viewing time on free, ad-supported TV services (FASTs) in the past year, and now nearly two thirds of us watch free platforms, according to Aluma Insights. That’s great news for advertisers and agencies, and not-so-great news for subscription-based providers.

  • 33% decreased their time watching subscription-based video-on-demand (SVOD) platforms.
  • 23% watched less broadcast and legacy cable/satellite TV.
  • 22% curtailed their viewing on virtual pay-TV streaming services such as YouTube TV

Escalating subscription services will not only grow FAST audience sizes, but also increase time dedicated to them. FAST viewing cuts into subscription and transactional video services as well as traditional TV. This means FAST viewership is contributing significantly to ad spending growth on CTV.

The number of US residents who don’t pay for traditional TV officially surpassed those who do in 2023, and this trend is expected to continue in 2024. Digital pay TV has attracted some viewers as an alternative to cable and satellite TV, but the rate at which digital pay TV is replacing cord-cutters is slowing, and digital pay TV services have replaced just 37.9% of viewers who abandoned traditional TV between 2015-2024.

Forecasts anticipate that the CTV ad opportunity is only getting bigger, with almost all of TV’s ad spend growth coming from CTV in 2024, according to Emarketer.

In contrast, linear TV ad spending is dropping faster than expected, with a 9.4% YoY decrease to $60.38 billion from 2022 to 2023. TV ad spending in 2024 will see a minor increase due to political advertising, but the bump is expected to be followed by another decline in spend for 2024. With these ad revenue opportunities in CTV, the key trend to follow is how well platforms balance their revenues and profitability goals with viewers’ ad experiences and desire for balanced ad loads.

The trend of streaming services joining forces through acquisition or bundling services is likely to continue into 2024. Even as streaming services strive to retain customers by offering ad-supported tiers, subscribers are showing a willingness to cut services and manage their streaming expenses by leaving platforms, primarily influenced by rising subscription costs.

The streaming ecosystem continues to evolve, with several changes on the horizon, but the success of the myriad platforms will ultimately come down to their ability to craft a balanced blend of ad venues, ad loads, and content offerings–and viewership data will swiftly show how well they do, or do not, achieve that balance.

The digital media pros at Brkthru are bullish on CTV, and welcome having a conversation about opportunities for agencies and advertisers. Just swing by

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