• Subscribe to our newsletter
The Media Online
  • Home
  • MOST Awards
  • News
    • Awards
    • Media Mecca
  • Print
    • Newspapers
    • Magazines
    • Publishing
  • Broadcasting
    • TV
    • Radio
    • Cinema
    • Video
  • Digital
    • Mobile
    • Online
  • Agencies
    • Advertising
    • Media agency
    • Public Relations
  • OOH
    • Events
  • Research & Education
    • Research
    • Media Education
      • Media Mentor
  • Press Office
    • Press Office
    • TMO.Live Blog
    • Events
    • Jobs
No Result
View All Result
  • Home
  • MOST Awards
  • News
    • Awards
    • Media Mecca
  • Print
    • Newspapers
    • Magazines
    • Publishing
  • Broadcasting
    • TV
    • Radio
    • Cinema
    • Video
  • Digital
    • Mobile
    • Online
  • Agencies
    • Advertising
    • Media agency
    • Public Relations
  • OOH
    • Events
  • Research & Education
    • Research
    • Media Education
      • Media Mentor
  • Press Office
    • Press Office
    • TMO.Live Blog
    • Events
    • Jobs
No Result
View All Result
The Media Online
No Result
View All Result
Home Advertising

Paradox: Streaming wars will be great for TV advertisers

by Dave Morgan
October 14, 2019
in Advertising
0 0
0
Paradox: Streaming wars will be great for TV advertisers
Share on FacebookShare on Twitter

We’re in the midst of the streaming wars, as Netflix, Amazon Prime, Hulu and a host of smaller players like Tubi, Fubo and CBS All Access fight to win new streaming video subscribers.

The battle is escalating, with new entrants from Disney (Disney+), AT&T’s WarnerMedia (HBOMax), Apple (TV+) and Comcast/NBCUniversal (Peacock).

All of them want lots of sign-ups, and they want them fast. Their products are coming to market priced to sell, aiming to separate viewers from their legacy pay TV packages. Collectively, these companies are spending tens of billions of dollars a year on original shows and movies.

If they are successful, it would be bad for the television industry, right? And for TV advertising in particular, since less viewership means fewer eyeballs to sell?

Paradoxically, I don’t think it will be bad at all. In fact, it’s quite likely the streaming wars will end up benefiting the TV ad business. Here’s why:

Little or no ad load from new streaming subs. Netflix, Prime and a chunk of Hulu don’t have ads. Neither will Disney+, HBOMax and Apple’s streaming products. Since lack of ads will be a real selling point in all of these services, we’re not likely to see ad loads in these services any time soon. 

Taking viewers out of TV and moving them into ad-free streaming services means the legacy TV ad load only becomes more important and valuable because it is still the only way to reach remaining viewers at any kind of scale.

Much of America can’t access streaming services. It’s critical for folks to understand that 35% of America don’t have fixed broadband at home (according to Pew Research) and 20% of those who do have suboptimal speeds for watching HD programming (Microsoft).

Unlimited content, fixed wallets. Streaming services are a luxury. The number of folks who have the discretionary income to buy them isn’t unlimited. 40 million Americans participated in the food stamps program last year.
Over-the-air TV is free to all. Low-cost bundles from cable or satellite are in many lower-income homes, where people watch lots of ad-supported TV. While those folks don’t buy as much as wealthier populations, they do spend a lot on food, cars, phones, insurance, gasoline, etc.

95% of the premium video ad load is on linear TV, 5% on OTT. When you look at where viewers watch premium video advertising, linear TV represents the vast majority of impressions. First, because it reaches so many people: 300 million in the US, for an average of four hours per day.Second, because linear TV shows so many ads — 16-18 minutes of ads per hour — while OTT services show either none, or little: typically two to six minutes per hour.

Since the bulk of the services coming out don’t have much ad support, OTT streaming services won’t add much relative ad load to replace what iinear TV will lose due to audience erosion.

In the world of TV, less means more. As everyone in  TV advertising — or in the world of any other scarce, valuable, supply-constrained commodities — knows, less of it means higher prices for what is there.


As we have seen over the past few years, declining ratings for top TV shows have been offset by higher prices on a cost-per-thousand basis for spots on those shows. That’s  how the market operates.

Thus, linear TV viewership losses to streaming services that aren’t accompanied by comparable ad load growth by those services means TV ad dollars will largely stay on TV, and will be priced higher. A bit paradoxical, for sure — but the likely reality, just as sure.

Best place to find people who like to watch TV is on TV. Finally, TV advertising will benefit because billions of dollars will be spent by streaming services to find people to subscribe to their services. No media channel is better for that than TV. They will get most of those billions. Simple as that.

So, will the streaming wars be good for TV advertising? What do you think?

This story was first published by MediaPost.com and is republished with the permission of the author.


Dave Morgan, a lawyer by training, is the CEO and founder of Simulmedia. He previously founded and ran both TACODA, Inc, an online advertising company that pioneered behavioural online marketing and was acquired by AOL in 2007 for $275 million, and Real Media, Inc, one of the world’s first ad serving and online ad network companies and a predecessor to 24/7 Real Media (TFSM), which was later sold to WPP for $649 million. Follow him on Twitter  @davemorgannyc

Tags: Amazon PrimeDave MorganHuluNetflixSimulmediastreamingstreaming warsTVTV advertising

Dave Morgan

Dave is the CEO and founder of Simulmedia. He previously founded and ran both TACODA, Inc., an online advertising company that pioneered behavioral online marketing and was acquired by AOL in 2007 for $275 million, and Real Media, Inc., one of the world’s first ad serving and online ad network companies and a predecessor to 24/7 Real Media (TFSM), which was later sold to WPP for $649 million. After the sale of TACODA, Dave served as Executive Vice President, Global Advertising Strategy, at AOL, a Time Warner Company (TWX). A lawyer by training, Dave served as General Counsel and Director of New Media Ventures at the Pennsylvania Newspaper Association in the early 1990’s. Dave received a B.A. in Political Science from The Pennsylvania State University and a J.D. from the Dickinson School of Law. He serves on the boards of the International Radio and Television Society (IRTS) and the American Press Institute (API), and was a long-time member of the executive committee and board of directors of the Interactive Advertising Bureau (IAB). He and his wife, writer Lorea Canales, live in Manhattan with their two daughters.

Follow Us

  • twitter
  • threads
  • Trending
  • Comments
  • Latest
Kelders van Geheime: The characters are here

Kelders van Geheime: The characters are here

March 22, 2024
Dissecting the LSM 7-10 market

Dissecting the LSM 7-10 market

May 17, 2023
Keri Miller sets the record straight after being axed from ECR

Keri Miller sets the record straight after being axed from ECR

April 23, 2023
Getting to know the ES SEMs 8-10 (Part 1)

Getting to know the ES SEMs 8-10 (Part 1)

February 22, 2018
Sowetan proves that sex still sells

Sowetan proves that sex still sells

105
It’s black. It’s beautiful. It’s ours.

Exclusive: Haffajee draws a line in the sand over racism

98
The Property Magazine and Media Nova go supernova

The Property Magazine and Media Nova go supernova

44
Warrant of arrest authorised for Media Nova’s Vaughan

Warrant of arrest authorised for Media Nova’s Vaughan

41
South Africa’s commerce media moment has arrived

South Africa’s commerce media moment has arrived

May 30, 2025
Seven Days on Social Media: Child Protection Week, #MyDisappointment and a soppy seal

Seven Days on Social Media: Child Protection Week, #MyDisappointment and a soppy seal

May 30, 2025
Navigating the AI tide without losing our humanity

Navigating the AI tide without losing our humanity

May 29, 2025
The marketing mission remains clear

The marketing mission remains clear

May 29, 2025

Recent News

South Africa’s commerce media moment has arrived

South Africa’s commerce media moment has arrived

May 30, 2025
Seven Days on Social Media: Child Protection Week, #MyDisappointment and a soppy seal

Seven Days on Social Media: Child Protection Week, #MyDisappointment and a soppy seal

May 30, 2025
Navigating the AI tide without losing our humanity

Navigating the AI tide without losing our humanity

May 29, 2025
The marketing mission remains clear

The marketing mission remains clear

May 29, 2025

ABOUT US

The Media Online is the definitive online point of reference for South Africa’s media industry offering relevant, focused and topical news on the media sector. We deliver up-to-date industry insights, guest columns, case studies, content from local and global contributors, news, views and interviews on a daily basis as well as providing an online home for The Media magazine’s content, which is posted on a monthly basis.

Follow Us

  • twitter
  • threads

ARENA HOLDING

Editor: Glenda Nevill
glenda.nevill@cybersmart.co.za
Sales and Advertising:
Tarin-Lee Watts
wattst@arena.africa
Download our rate card

OUR NETWORK

TimesLIVE
Sunday Times
SowetanLIVE
BusinessLIVE
Business Day
Financial Mail
HeraldLIVE
DispatchLIVE
Wanted Online
SA Home Owner
Business Media MAGS
Arena Events

NEWSLETTER SUBSCRIPTION

 
Subscribe
  • About
  • Advertise
  • Privacy & Policy
  • Contact

Copyright © 2015 - 2023 The Media Online. All rights reserved. Part of Arena Holdings (Pty) Ltd

No Result
View All Result
  • Home
  • MOST Awards
  • News
    • Awards
    • Media Mecca
  • Print
    • Newspapers
    • Magazines
    • Publishing
  • Broadcasting
    • TV
    • Radio
    • Cinema
    • Video
  • Digital
    • Mobile
    • Online
  • Agencies
    • Advertising
    • Media agency
    • Public Relations
  • OOH
    • Events
  • Research & Education
    • Research
    • Media Education
      • Media Mentor
  • Press Office
    • Press Office
    • TMO.Live Blog
    • Events
    • Jobs

Copyright © 2015 - 2023 The Media Online. All rights reserved. Part of Arena Holdings (Pty) Ltd

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?