Major streaming advertising video-on-demand (AVOD) players showed a slight 3.4% decline in business to $1.6 billion in the first quarter of 2023, according to analysis from MoffettNathanson Research.
But for full-year 2023, business for all major AVOD platforms is estimated to see recovery with double-digit percent gains of 21.3% to $12.1 billion.
The decline for first-quarter AVOD/FAST (Free Ad-Supported Television) advertising comes amid an overall slowdown in national TV, due to a softening of scatter-market activity.
Local TV advertising revenue declined in the first quarter due to lower core ad spend, as well as seasonal declines coming from less political ad spending.
Research shows Hulu took a major hit -- down 17.4% in the first three months of the year to $731 million (from $884 million in the first quarter of 2022). Pluto slipped 4% to $216 million.
Roku Channel was virtually flat at $222 million. Last fall, Roku executives warned about a softening of the advertising market.Smaller AVOD platforms, Peacock and Tubi, showed gains -- Peacock, up 26% to $304 million; Tubi, gaining 31% to $170 million.
MoffettNathanson results do not include the new advertising-tier options offered by Netflix and Disney+.
Factoring in lower first-quarter expectations, the authors pulled back on their estimates for the entire year of 2023 for all major AVOD platforms -- projecting a rise of 21.3%. The previous estimate was an increase of 24% for AVOD.
Looking at all digital/online media platforms -- the biggest media category for advertising (which includes Google, Facebook and Amazon) --- the research company estimates an increase of 9% to $201.9 million. The next biggest category -- TV -- will sink 5% to $79.4 billion.
Total U.S. advertising is expected to climb 3.6% to $319.1 billion. Looking at just traditional media, without all digital advertising and AVOD -- analysts predict a 7% decline to $105.1 billion.