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Ad-supported video-on-demand (AVOD) and subscription video-on-demand (SVOD) are driving the increases, but the field is crowded. CTV broadly, and subscription over-the-top (sub OTT) specifically, are doing extremely well, but life is tough for individual players because the competition is so fierce. Dozens of service providers will vie for a slice of this year鈥檚 $26.92 billion in spending.

That increase is being driven by consumers watching more subscription over-the-top (sub OTT) services such as Amazon Prime and Netflix, more ad-supported video-on-demand (AVOD) services like Hulu and Tubi, and more YouTube. CTV time spent accounts for 84% of time spent with 鈥渙ther connected devices.鈥� This forecast features eMarketer鈥檚 first estimate of US adults鈥� time spent with CTV from 2019 to 2024.

Late arrivals and free ad-supported streaming TV (FAST) services have built large audiences quickly. Late-to-the-game HBO Max (soon to be just 鈥淢ax鈥�), Paramount+, and Peacock have all built sizable viewer bases in just a few years. Previously lesser-known free services like The Roku Channel, Tubi, and Pluto TV have also surged past the 50 million viewer mark in short order.

Regardless of the outcome, pay TV is still set to lose a significant share of viewers as ad-supported video-on-demand proliferates and consumers seek cheaper access to entertainment.

Our take: It may be some time before an ad-supported video-on-demand (AVOD) tier makes its way to Prime Video, but it鈥檚 clear that the company鈥攁nd streaming industry as a whole鈥攁re determined to move in that direction.

Why it matters: Amazon joins the growing AVOD market at a strategic moment as the industry leans more toward ad-supported models. The addition is set to more than double Amazon鈥檚 CTV ad revenues from $1.39 billion last year to $3.13 billion in 2024. Will it work?

As streaming costs continue to rise, expect free ad-supported streaming TV and ad-supported video-on-demand services to climb as consumers opt into advertising in exchange for watching their favorite content more cost-effectively. CTV鈥檚 impact on other ad channels. With both viewership and ad inventory growing rapidly, advertisers are coming around on CTV鈥攁nd so are their investments.

The ad-supported video on demand (AVOD) experience could worsen as subscription services adopt ads. They need to be careful not to increase ad loads too much. 鈥淚t is such a slippery slope and so easy to add one more minute here, one more minute there, and then we get back to the awful user experience that linear became,鈥� warned Zucker. This was originally featured in the eMarketer Daily newsletter.

Free ad-supported streaming TV (FAST), such as Pluto TV and Tubi. Ad-supported video-on-demand (AVOD), such as The Roku Channel and ad-supported versions of subscription services like Netflix and Disney+. YouTube, which will have nearly 45% of its viewing time on CTVs. Digital live TV services, such as Hulu + Live TV.

Perhaps the most notable is ad-supported video-on-demand (AVOD). AVOD services will add 13.3 million US viewers this year, more than triple the 4.3 million that subscription OTT services will add, according to our March forecast. Major services like Disney+ and Netflix have also launched advertising subscription tiers, spurring brand interest.

Free ad-supported streaming TV (FAST), such as Pluto TV and Tubi. Ad-supported video-on-demand (AVOD), such as The Roku Channel and ad-supported versions of subscription services like Netflix and Disney+. YouTube, which will have nearly 45% of its viewing time on CTVs. Digital live TV services, such as Hulu + Live TV.

In 2024, free ad-supported streaming TV (FAST) viewers will reach 104.4 million, while ad-supported video-on-demand (AVOD) viewers will hit 180.2 million, per our forecasts. 40% of US adults have increased their viewing time on FASTs in the past year, according to Aluma Insights. The concurrent growth of viewership and ad loads on FAST and AVOD services may accelerate ad fatigue even further.

Fox Corp. Q3 fueled by political ads and Tubi growth: Live sports and news strategy drives gains, with digital ads growing.

Apple feels the pain of Apple TV+ struggles: Its Q4 revenues missed the mark in some divisions including Services, which includes advertising.

Netflix continues its push into ad-supported video-on-demand (AVOD). Netflix boasted nearly 5 million ad-tier subscribers during its upfront presentation in an effort to secure advertiser confidence in the offering. The increased focus on its ad-supported tier is a concession of sorts for Netflix, which maintained an entirely subscription-based model for years.

That extreme spike mostly derives from Amazon switching all Prime Video users to ad-supported video-on-demand (AVOD) status in early 2024, but healthy OTT ad increases will continue beyond this year. Amazon crosses categories more than any other ad industry player: Most of this income will count as CTV ad revenues, and all of it will count as retail media revenues as well.

For now, consumers are more inclined to pay for an ad-free streaming experience (i.e., subscription video-on-demand, or SVOD) than one with ads (i.e., ad-supported video-on-demand, or AVOD). Subscription OTT penetration is low but poised for growth.

For the first time, our industry KPIs include ad-supported video-on-demand (AVOD) CPMs. Our KPIs include CPM and impressions data for Netflix, Disney+, Hulu, Peacock, and YouTube. Our forecast covers average prices for broad targets.

Prime Video launched its ad-supported tier this year and is already set to become a major competitor in the subscription, ad-supported video race. Amazon's Q1 ad revenues grew 24% to $11.8 billion thanks in part to Prime Video's ad rollout, which reached about 115 million monthly US viewers.

US programmatic digital display ad spend will grow 13.3% next year, reaching $178.25 billion, thanks to the rise of video formats on free ad-supported streaming TV channels and ad-supported video-on-demand tiers. Use this chart:. Evaluate your digital display ad spend. Make a case for increased investment in programmatic. More like this:. Preparing for 2024鈥檚 programmatic ad trends and predictions.

More people will watch YouTube than subscription OTT, ad-supported video on-demand, or free ad-supported streaming TV. YouTube was the second largest TV distributor by watch time in June 2024, behind only The Walt Disney Company, according to Nielsen. 3. YouTube is the biggest smartphone app by users.

Now, though, there are subscription services offering ad-supported tiers, a broader swath of other ad-supported VOD in the market (including a burgeoning BVOD space), and new video channels in entirely different environments (e.g., TikTok). Different platforms will require different applications.

Netflix Moments boosts social sharing: New feature allows users to save and share scenes, expanding Netflix鈥檚 organic reach.

This growth is due to the ever-expanding subscription-based and ad-supported video on demand (SVOD and AVOD) and ready access to such content using the largest screen in the house. Smart TV penetration is a major factor. Several studies show more than half of households in Canada own a smart TV, making access to over-the-top (OTT) content easy.