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Continual cord-cutting is reducing linear TV ad spending, which in turn reduces upfront linear commitments. Upfront linear TV ad spending peaked in 2022 and the decline shows no signs of reversing. Upfront linear TV spending is declining in tandem with total linear TV ad spending. Between 2021 and 2024, US linear TV ad spending had a negative 3.5% CAGR.

Article: What a difference a year makes in cable cord-cutting.

This is good news for media buyers previously shut out from a growing base of cord-cutters. Our forecasts show:. CTV ad spend will reach the C$1 billion ($806.7 million) milestone in 2023, and it鈥檒l make up a quarter of total TV ad spending. There will be 4.1 million cord-cutter households in Canada next year, more than a quarter (26.5%) of total residences. Predictions.

These include economic uncertainty, falling ratings, cord-cutting, downward pricing pressures, shifts in viewership from TV to CTV, and migration of ad dollars from traditional to digital media. Despite the drop, the upfronts make up a growing portion of the TV ad market. Roughly 30% of total TV ad spending will happen during the upfronts, a portion that has inched up over the past five years.

Over 33% of US consumers were cord cutters in 2022, a historic shift that placed advertising power in the hands of streamers. The new kids on the block like Netflix and Warner Bros. Discovery charged record-high CPMs, driven by their brand power and a tight spending market. Early efforts have struggled, though.

Despite the steady growth of streaming services and the higher-than-ever rates of cord-cutting among US consumers, some doubt was cast on the effectiveness of streaming and connected TV measurement this year thanks to a deluge of new ad-supported offerings and addressability issues on CTV devices.

That difficulty has only grown as the number of US homes watching linear TV has decreased, and the number of cord-cutting households is expected to increase nearly 29% by 2026, according to our forecast. According to a Nielsen study commissioned by Google, TV marketers' ROI fell by 41% on average when frequency topped six-plus weekly impressions, which accounts for 46% of TV impressions given.

One of the biggest markets affected by the downturn is linear TV. 2022 is a record year for cord-cutting鈥攚e forecast that just over a third of US households will drop cable and satellite this year, prompting many advertisers to look to digital channels instead. As a result, linear TV will make up less than 20% of US ad spending for the first time ever.

Cord-cutters鈥攃able or satellite subscribers who have canceled their service鈥攃ontinue to rise. This year, there will be 3.9 million cord-cutter households in Canada, equal to 7.9 million viewers. Cord-never households, defined as households that never had access to a traditional pay TV service, will reach 2.0 million this year.

鈥淲ith a steady drumbeat of cord-cutting looming over the industry, streaming and programmatic will play a bigger role than ever in this year鈥檚 upfront negotiations,鈥� Mitchell-Wolf said. Watch the full webinar. This was originally featured in the eMarketer Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.

That鈥檚 well below the 38 million US households that still pay for a cable service, though the rise of cord-cutting will likely cause more consumers to seek out digital pay TV services. The long game: YouTube is paying a hefty fee for the rights to broadcast Sunday Ticket, and it cranked up the price soon after in order to show investors that it can make returns on the steep investment.

As cord-cutting reaches record highs, sports leagues are realizing there鈥檚 a highly lucrative opportunity in auctioning off a new set of broadcast rights to streaming services eager to gain new viewers in a tight market. Amazon Prime Video bought rights to Thursday Night Football for $11 billion, and YouTube recently purchased the NFL Sunday Ticket for a reported $2 billion yearly.

CNN has undergone some very public struggles this year like the dramatic failure of CNN+ and the end of the Trump administration ratings bump, made worse by a cord-cutting landmark and overall reduced ad spending. To top it off, the Warner Bros. Discovery merger left CNN鈥檚 parent with an enormous debt load that has triggered layoffs at nearly every sector of the company.

Cord-cutters, those who have canceled their pay TV, and cord-nevers, those who have never subscribed to pay TV, are on the rise. In 2022, the proportion of US households with traditional pay TV services dropped below half for the first time. By the end of 2027, we expect the portion of pay TV users to be just over one-third, per our forecast.

How we got here: Earlier this month, the company announced a 5% rise in third-quarter revenues, but the figures fell short of projections due to cord-cutting and a decline in ad revenues. The TV media sector, which includes cable networks MTV, Nickelodeon, Comedy Central, Showtime, and the broadcast network CBS, saw revenues fall 5% to around $4.9 billion from Q2.

But while advertising may be in a rough state, marketers have little choice: Historic levels of cord-cutting and the increasing shift to digital platforms mean they have to spend their money online one way or another.

Paramount snapped up Pluto TV in 2019, while Fox acquired Tubi a year later, kicking off rising interest in FAST services among advertisers, TV industry professionals, and cord-cutters alike. Below are five charts to help you understand the growth of FAST. FAST will reach over 100 million viewers this year.

In the past, TV networks have recovered cord-cutting losses by raising ad prices. Yet, in 2023, primetime upfront costs per thousand (CPMs) are forecast to drop 2.7% for broadcast networks and 5.0% for cable, per Media Dynamics. 2. Seeking profitability, streaming services are raising subscription prices and getting more serious about advertising.

And now, if you look at cumulative cord-cutters, since these services debuted about nine years ago, they've replaced somewhere around a third or less of all the cord-cutters. Marcus Johnson:. Yeah. I actually pulled those numbers. Traditional Pay TV handily beating Digital Pay TV in terms of who watches it. 112 million Americans will watch traditional Pay TV.

I would reserve cord-cutting. Let's call it 20%. Marcus Johnson:. Okay, perfect, so ad ecosystem's obsession with performance, 55%, spending from Chinese advertisers, 25, and then core-cutting acceleration, 20. Minda, what would your pie chart look like? Minda Smiley:. Yes. Mine looks quite different actually, which should be interesting.

Pay TV will give way to streaming as cord-cutting accelerates. Pay TV is losing viewers to streaming services in Latin America, but it鈥檚 not doom and gloom鈥攆or now. In certain countries, consumers still consider paid streaming services to be complementary to their pay TV subscription. Brazil is shedding pay TV viewers at an alarming rate.

It could complicate yield management, but as cord-cutting continues and the linear and CTV markets converge, the tide is turning to programmatic anyway. It鈥檚 in networks鈥� best interest to incorporate programmatic guaranteed or preferred deals into upfront commitments in some form to ensure there鈥檚 enough demand to fuel the long-established tradition of selling inventory in bulk so far in advance.

Roku soars ahead in Q2: The platform is second only to Hulu and YouTube in CTV ad spending. Its earnings revealed interesting findings about viewing habits.

Nearly 30% of the adult population won鈥檛 qualify as a traditional TV viewer this year, but the non-cord-cutters and antenna users still out there will tune in for 4:06 per day. This represents a 12-minute decline from 2022, but it still puts traditional TV well ahead of the other individual activities we break out. Audio takes up an enormous amount of time given its small role in the marketing world.

These include economic uncertainty, falling ratings, cord-cutting, downward pricing pressures, shifts in viewership from TV to CTV, and migration of ad dollars from traditional to digital media. Despite the drop, the upfronts make up a growing portion of the TV ad market. Roughly 30% of total TV ad spending will happen during the upfronts, a portion that has inched up over the past five years.