News of ever-lower pay TV subscribers doesn’t sound any alarm bells any more. But perhaps this projected metric might:
Non-pay TV homes may equal legacy pay TV homes in two years -- at around 55 million
homes each, according to MoffettNathanson Research.
We expect there will be an associated shift for media buying. National TV -- traditional and otherwise -- is roughly around $66 billion -- $45
billion via traditional national TV and $21 billion for CTV/OTT in 2021.
Currently, major traditional TV players are readying big TV ad
streaming/on-demand platforms -- Hulu (for Disney); Paramount+ (for ViacomCBS); Peacock (NBCUniversal); HBO Max (WarnerMedia); and discovery+ (Discovery); among others. This is in addition to the
Rokus, Amazon Fire TVs, YouTubes of the world.
In reality, will next year’s upfront investment for marketers shift dramatically to those streaming and/or non-pay TV platforms -- perhaps
to a 60%/40% split among traditional TV and non-traditional TV media placements? That would be a big ask.
While measurement, of course, is a major question mark for many, perhaps there is
another more basic issue: inventory. Is there enough advertising inventory to accommodate all veteran, big branded TV/video marketers for that shift?
Right now, many premium streamers --
including some of the oldest like Hulu -- have limited TV advertising inventory, around 7 minutes/30 second in an hour-long; 4 minutes/30 second in a half-hour show. This is a major part of the
attraction for consumers: a better, less cluttered ad TV experience in the streaming world.
Still, we know the TV business can be extremely fluid. No reason we couldn’t see a slight rise
in the addition of such premium streaming inventory -- or overall price hikes. Especially with ever-rising TV productions cost and programming rights fees.
Remember a few years ago, when the
traditional pay TV world was excited with the promise of virtual pay TV services, like Hulu + Live TV, YouTube TV, and others, with promises of inexpensive pricing versus costly legacy pay TV bundles?
Prices started as low as $20 a month for Sling TV in 2015.
Now, Hulu is at $64.99 for its Hulu + Live TV platform (and $70.99 with no advertising). YouTube TV is also at $65/month. This
isn’t that much of a discount to legacy pay TV, which can be priced at $80 a month for a modest expanded, basic cable networks package.
Those healthier business platforms, as well as new
premium streamers, already have razor-thin profit margins. Many others are still posting big net losses.
Should we expect a slight change in ad inventory, given the promise of less than
traditional TV networks’ 14 minutes to 17 minutes ad-promotional/non-programming time per hour?
Getting to a full 50-50 TV world seems to mean all parties need to share the load -- and
cost.