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Free from outdated broadcasting constraints, streaming apps are absorbing billions in ad budgets, targeting cord-cutting audiences and premium content environments. However, this explosive growth brings familiar challenges. Rampant fraud and opaque ad placements are beginning to encroach on what was once considered a safe haven from controversies plaguing social media feeds and user-uploaded content.

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.

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.

Why it matters: While a merger may provide temporary relief, it likely won鈥檛 solve the fundamental challenges facing satellite TV providers as cord-cutting accelerates. Unlike cable companies, satellite providers can鈥檛 easily diversify into other services like internet access. Listen to the full episodes (Part One, Part Two). This was originally featured in the 蘑菇AV Daily newsletter.

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.

There鈥檚 no turning back the tide of cord cutting. The traditional cable, satellite, and telco pay TV bundle continues to lose ground to streamers, and the trend is irreversible. The resolution of the Disney-Spectrum dispute was only a temporary respite. The existential questions that the carriage scuffle brought up are still latent.

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.

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.

Comcast Q3 performance fueled by streaming and live sports: Olympics and Peacock growth attract high-value audiences for advertisers.

FAST trend grows globally: New channels from Free Live Sports, CBC, and Pluto TV showcase demand for free, ad-supported streaming options.

As consumers increasingly cut the cord, connected TV (CTV) has emerged as a key platform for advertisers, with US brands expected to spend over $28 billion on CTV in 2024, according to 蘑菇AV. CTV鈥檚 performance-driven features, like precision audience targeting and detailed reporting, are transforming TV advertising and making it accessible for businesses of all sizes.

But increased cord-cutting will lessen its importance in Latin America. Paid streaming still lags other types of video content. But as these service providers continue to make inroads, the number of subscription OTT viewers will keep on rising in Latin America.

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.

Streaming cancellations rise as costs climb: Major platforms like Netflix and Disney+ are adapting with new strategies.

It turns out there's this massive, massive audience that's extremely hungry for this kind of programming, which makes sense if you think about how many of these folks are probably cord cutters and they've cut themselves off from the traditional cable TV experience. And this sort of gives it back, a little bit minus the sports and the prestige TV, but it does give it back.

They were in sort of a weird spot where the pace of cord cutting was probably pretty bad for them.

ESPN is not getting more valuable as an asset because of all the cord cutting we've been alluding to throughout this episode. And I think that the prospect of finding a strategic partner is pretty difficult. You think about the types of companies that would most logically stand into help with distribution and tech, and those are companies like Apple and Amazon.

I also think it's interesting that these numbers line up with so much of our data, including some of our most recent forecasts on things like time spent with connected TV, on cord cutters, on the crossing lines between the digital video and the traditional TV audience, meaning that video is surpassing traditional TV in terms of time spent.