• by Wayne Friedman , October 24, 2023

As streaming TV consumption continues to grow and linear TV consumption drops, Madison and Wall’s Brian Wieser estimates resultant linear TV and connected TV advertising inventory will drop by around 24% between 2023 and 2027 -- around 6.6% per year.

Wieser points to less “ambient” linear content consumption, along with lower pay TV penetration of linear TV networks.

At the same time, he projects, streaming TV usage will continue to accelerate in growth.

Advertising’s share of total streaming/linear TV consumption is projected to fall from 13.1% of time spent with TV in 2023 to 10.6% by 2027, factoring in that ad loads per hour for big, premium streaming services are well below the average 12 minutes per hour of linear TV (especially broadcast networks).

Disney+, Netflix, Max, Paramount+ and Prime Video each air around four minutes per hour of advertising, compared to Tubi with five minutes and Hulu and Roku at 8 minutes each. Only Pluto is near linear TV levels at 12 minutes.

Writing in his Madison & Wall substack column, Wieser says he expects Netflix’s advertising tier to also be a major factor. 

“If more than a minority chose to watch a significant volume of content on the largest streaming service, this could conceivably change the trajectory for available ad inventory.”

By 2027 -- sans YouTube and other platforms -- he projects 54% of TV viewing to be on streaming, with 46% on linear TV. Currently, for this year, streaming has a 32% share, while linear TV (broadcast and cable) is at 68%.

In addition, if YouTube is included, he estimates, the share would grow to 19% of total linear/streaming consumption in four years. “Total ad-supported TV ad inventory under this broader definition would still be down by 13% between 2022 and 2027.”