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A Look at Streamers and Ad-Supported Content on CTV

The digital video industry is thriving, according to a report from eMarketer/Insider Intelligence, focused on video forecasts and trends in Q1. After overcoming hurdles last year, including intense competition among top players and missed subscription goals, the CTV/Streaming sector is poised for continued growth and innovation.

Ongoing economic uncertainty is prompting consumers to seek low-cost streaming packages at unprecedented rates. Disney Plus and Netflix made news by introducing ad-supported models after years of holding out—though these additions presented some initial challenges. Netflix, for example, missed its first-month viewership guarantees, but eventually the king of streamers found its groove and added one million monthly active users in January, reports Bloomberg

Growth was especially high among ad-supported video-on-demand services like Roku, Tubi, and Pluto, which added 11.9 million new viewers in 2022. Meanwhile, the subset of AVOD known as free premium video streaming, should top 100 million US viewers in the coming months.

Apple TV may become the next mega streamer to debut an ad-supported tier, following its licensing of top sports content from both Major League Baseball (MLB) and Major League Soccer (MLS). Investment in sports overall was high for streaming services in 2022, hitting $5.2 billion around the world for sporting events and matches alone. It was a huge increase over the $2.9 billion spent in 2021, per an analysis from Ampere. This year, that number is expected to skyrocket to $8.5 billion.

Cord-cutting trends are also expected to continue. Fewer than half of US homes currently subscribe to traditional pay TV, and by 2024, homes with Connected TV devices will more than double those of linear TV.  As viewing habits continue to shift toward digital platforms, eMarketer predicts that US adults will spend three hours and 11 minutes viewing non-linear video this year, compared to two hours and 55 minutes spent watching traditional TV.

Streaming services overall are enjoying a windfall. Revenue is expected to top $50 billion in 2023, growing at a year-over-year rate of 12.5%. Looking ahead to 2026, that number could reach $64 billion, which is more than double the amount earned by OTT platforms in 2020. Ad-supported models are making it increasingly possible for consumers to stack up multiple streaming services: The average US home boasted 5.4 separate streamers in Q4 2022, up from 5.2 in Q3, according to a January 2023 Kantar report.

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