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As the TV and streaming landscape becomes increasingly fragmented, the terms used to describe different ways to watch are multiplying. We’ve already broken down the difference between connected TV (CTV) and OTT. With subscription video-on-demand (SVOD) platforms becoming ad-supported SVODs, and ad-supported video on demand (AVOD) platforms building out free ad-supported TV (FAST) platforms, it’s difficult to keep track of what cord-cutters are actually watching. Here’s a breakdown.

It is one of the most common digital activities in the world, but many of these viewers won’t yet be watching OTT video via familiar platforms like YouTube or formats like paid sub OTT streaming—also known as subscription video-on-demand (SVOD). OTT video entertainment is mainstream and available almost everywhere, but billions of people still haven’t come onboard.

More subscription video streaming services are pushing advertising. At the same time, free ad-supported streamers are gaining viewers. These developments provide advertisers with more options to find audiences.

We expect US subscription OTT video ad spending to near $10 billion and account for 3.4% of all digital ad spending—and 10.2% of total video ad spending—by the end of 2023.

The majority of subscription video-on-demand sign-ups on Peacock and Hulu are ad-supported, according to Antenna, accounting for 69% and 58% of overall subscription plans, respectively.

Meanwhile, Netflix has dominated the subscription video-on-demand landscape. However, uptake of ad-supported options is beginning to increase. This is likely due to the cost-of-living crisis continuing to affect consumers’ media subscription budgets. ITVX, the public broadcaster’s digital platform, reported a 15% increase in total viewing hours in the first nine months of 2024, for example.

Time spent with subscription OTT (sub OTT) will grow a few percentage points per year for the next few years. Netflix’s share of total time spent in 2024 was larger than that of any other streaming service, according to Comscore. The vast majority of Netflix viewing is still happening ad-free.

The sports rights spending of subscription OTT services will increase by more than $3 billion this year to reach $8.5 billion worldwide, according to Ampere Analysis. Their monthly viewership will also grow, per our forecast, surpassing 2 billion for the first time in 2023.

Much of this digital consumption is TV-like, though—subscription OTT (sub OTT) and broadcaster video-on-demand (BVOD) have seen gains, for example. Video is also having a big impact on social media time. TikTok’s growth in the UK has led other platforms to pivot to video content. The increase in this type of content is leading to increased time spent on social media.

It would be poorly timed given the proliferation of ad-supported subscription OTT tiers, free ad-supported streaming TV (FAST), and digital pay TV services counting on CTV’s momentum. But CTV is also well-positioned to ride out 2025’s instability if the worst-case economic scenario does not come to pass. Click here to view our full forecast for US connected TV ad spending.

Importance of free content: The saturation and rising costs of (ad-free) subscription video-on-demand (SVOD) services have led consumers to seek more affordable options for entertainment. Roku makes connected TV (CTV) devices, runs an operating system, and produces original content, giving its business several pillars to stand on.

Exactly 60% of Gen Zers prefer user-generated content over subscription video-on-demand, according to Deloitte’s October 2023 survey. Respondents gravitate toward content offered by social algorithms because it’s brought directly (and tailored) to them as opposed to having to search for new content on streaming platforms. Gen Zers overindex on every platform we track, particularly social platforms.