The holidays are over, a new year is upon us and CES—the conference that offers the first comprehensive look at the devices that will be absorbing consumers’ time in the months and years ahead—has wrapped. Which means the soothsaying season is shifting into high gear as the industry weighs in on the many facets of the media-advertising world with predictions for the year ahead. Here are a few insights into how the complex, fast-moving video and streaming market is expected to evolve this year.
Ad-Supported Models will Trump Subscription Services
Subscription fatigue is real and the forces behind it will only intensify in 2019, meaning that much of the streaming video market is likely to continue to move toward ad-supported models. The number of subscription services has grown rapidly over the past few years and consumers are showing that they’re not so ad-resistant that they’re willing to shell out for multiple subscriptions, parse through all the options or absorb cost increases. In addition, with Disney and AT&T entering the fray and Amazon focused on growing its advertising options, the ad-supported model is likely to become THE model, as Mark Zagorski, CEO of video ad platform Telaria told Video Insider.
Best of Both Worlds
eMarketer expects the rate of cord-cutting to continue to accelerate, mostly due to increasing adoption of linear OTT services, US audiences for which are expected to double by 2023. The good news is, traditional TV will stay strong. In eMarketer’s words, stakeholders in traditional TV will ride out the wave of OTT growth and cord-cutting in part because they’re all invested in broadband service, content ownership, digital distribution or some combination of the above. And the familiarity of the business model and guaranteed reach don’t hurt either!
I Want My CTV
As shown in our last two Video Benchmark reports, as well as in all the industry trades, CTV has been on a growth tear as of late. To date, advertiser uptake of CTV has lagged consumers’ enthusiastic embrace of it, in part because of confusion about the whole advanced TV universe and ad-delivery workflow issues. But as advertisers become more familiar with CTV, and move away from the siloed approaches to ad-delivery that introduce unnecessary complexity and inefficiency into workflows, the gap between viewer and advertiser adoption of CTV will continue to narrow.
More to Come
The above may be the most referenced projections in the trades this forecasting season, but that doesn’t mean that there aren’t plenty of other changes on the horizon that will keep the industry as dynamic as ever. eMarketer believes the year-end tension between CBS and Nielsen heralds more work toward ad targeting and measurement that will encompass both the linear and digital words. CES showed us that 5G is here and will usher in an explosion in experiential viewing. Social and mobile will continue to grow as will consumer concerns around privacy. As ever, marketers will have to keep on their toes and stay abreast of all the changes that will continue to push advertising forward in a content everywhere world.