In this new age of digital video on demand, traditional pay television continues to lose subscribers, according to data from the Leichtman Research Group. In 2018, pay TV providers lost approximately 3.1 percent of their subscribers, which may not sound like a lot but is in fact double the percentage from the previous year.
It’s even more when you realize that the top providers such as Comcast, Verizon, and a handful of others, make up about 95 percent of market.
At the same time, top paid OTT services such as Netflix appear to continue to be vacuuming up these customers. Last year, Netflix reported having 58.5 million subscribers in the U.S. and over 80 million international subscribers, far more than the top cable companies combined (which stands at 47 million in 2018).
Of course, that doesn’t mean that these lost subscribers are simply not watching TV anymore. In fact, just the opposite is true.
According to eMarketer, more and more OTT services are offering “skinny bundles,” that combine both video on demand and options for live viewing things like sports broadcasts. While these bundles are still a relatively new trend, eMarketer predicts that there will be more than 39 million cord-cutters in the U.S. and 37 million cord-nevers in 2018, meaning that more and more are likely to turn to these hybrid services.
And it makes sense that they would, based on customer research conducted by Lieberman Research Worldwide. Their survey found that satisfaction with OTT services outranks cable TV in nearly every category, with the exception being access to content, where cable TV only carries a slight advantage.
What does this trend mean for marketers? Well, for now, it’s not that serious. After all, linear TV still has a significant reach and not all OTT services offer advertising. But as the trend continues to develop, it’s likely that new opportunities will open up for marketers. Now, it’s possible that ad inventories on OTT channels will come with a higher CPM, given that services are not always operating on the same reach individually as they are as a group. But that also means the potential rise of “skinny bundled” ad placements as well, all delivered with digital targeting precision. In other words, this trend will likely impact how we buy media packages, as well as who we buy them from.
If you’re interested in learning more about targeted ads on OTT services, linear TV, or elsewhere, contact us. We can help you find the best channels to reach your audiences, no matter the medium.