Introduction
Engagement has always been critical to the TV industry. The medium’s ability to generate engaged audiences at scale, and reach those audiences with attention-grabbing audio-visual advertising, made it the largest and most important segment in the brand advertising space for decades. However, the advent of online media and entertainment has flipped the script. By 2030, the combined subscription and advertising revenue of online video – i.e. subscription video on demand (SVOD) and connected TV (CTV) advertising – will surpass that of traditional TV.
Digital platforms not only allow advertisers to reach huge, but also augment and analyze campaigns using vast swathes of content, user, and – increasingly – direct sales data. Meanwhile, the ascent of SVOD services, such as Netflix, during the 2010s conditioned audiences to become accustomed to ad-free premium TV and video consumption. For a time, the number of paying subscribers looked like it would become the most important measure of success in the TV and video industry.
Yet the past few years have driven a resurgence of audience engagement as the most important metric for TV and video players. The addition of an ad-supported tier to Netflix in 2022 served as a bellwether for the growing reliance on advertising within the online video space, with all major international SVODs now offer ad-supported tiers in select markets. Meanwhile, the advent of free-ad-supported streaming TV (FAST) and ad-supported video on demand (AVOD) is further driving up the viewing time – and volume of available ad impressions – within the CTV environment.
But, while consumer time spent with TV and video continues to grow, competition for consumer engagement is much stronger than it was in the heyday of traditional linear TV. Indeed, traditional broadcasters don’t just have to compete with each other, but also a growing number of premium online and social video platforms.
The shift (back) towards advertising as a key driver of revenue and profitability means that winning viewers – and keeping them engaged – is the most important factor for success in an increasingly online-focused TV and video market.
This report explores how players across the TV and video space are adapting to generate, maintain, and monetize engagement with video through new kinds of partnerships, content strategies, implementation of ad technology, and the convergence of retail media and CTV.
