3 APR 2024

USA: CTV consumption is winning terrain over linear TV

Recent studies by eMarketer analyzed the decline of traditional TV consumption, while the use of digital video increases throughout the years.

3 APR 2024

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US adults are spending more time with digital video and less time with traditional tv, according to the latest studies by eMarketer. The company forecasted that US adults will spend 55 minutes more per day with digital video than with traditional TV in 2024, with this difference increasing over the years.

TV’s decline in time spent will be more moderate than the company previously expected, as time spent with digital video climbs at a slower rate but still faster than time spent with traditional media is declining.

Moreover, eMarketer revealed that combined US TV and connected TV (CTV) ad spend will grow every year through to the end of 2027, when it will reach nearly $100 billion. CTV will account for all of the growth, with spending increasing by $5.5 billion YoY in 2024. CTV’s gains will make up for the decline of linear TV ad spend, which will drop 4.7% in 2025, 1.2% in 2026, and 4.0% in 2027.

Over the next four years, TV and CTV ad inventory is expected to fall by 24%, per Brian Wieser of Madison and Wall. This will be due in large part to the migration from linear to digital, where there are fewer ads being served. Higher CTV ad price points will help offset the drop in ad inventory.

In this context, eMarketer explained that media planners should be paying attention to both digital and linear TV, but attention is obviously moving toward the former. When preparing for upfronts, they should keep in mind that ads are almost everywhere now, which means an expanding menu of options.

Subscription OTT video is becoming a bigger part of people’s media diet. High use on platforms like Netflix and Hulu are contributing to the 1 hour and 49 minutes (1:49) that people will spend watching subscription OTT this year, per the company’s forecast. Both of those platforms now have ads, as do other large players like Amazon Prime Video, Max, and Disney+.

“These platforms are intensifying the efforts to attract more users into their platform with their original content or exclusive content,” said eMarketer’s forecasting analyst, Jasmin Ellis.

Despite an increasingly crowded field, Netflix is the subscription OTT platform to beat when it comes to viewership and time spent. That’s one of the reasons its password-sharing crackdown was so effective in driving new signups last year. “If other platforms were to do the same and not come out with more affordable options it would be a lot harder to be successful,” said Ellis.

Netflix has also been smart not to overload viewers on its cheaper tier with ads. Ad loads are still short right now compared to linear TV, and binge-watchers get an ad-free episode after every few episodes. But if Netflix and other platforms boost ad loads to increase revenues, time spent could take a hit from frustrated viewers logging off.