Connected TV Growth Poised to Accelerate in 2023
Note: This article is based on Variety Intelligence Platform’s special report “2023 Media & Tech Trend Tracker,” available exclusively to subscribers.
Connected TV is no longer the future but the present.
The format will ultimately be how the vast majority of TV content is viewed, consumed via apps built into smart TVs, and thus represents where ad revenue will derive.
This also explains why the likes of Comcast, Charter, Roku and Amazon have all announced plans to build their own TV sets in order to own as much of the new revenue stream as possible.
The Interactive Advertising Bureau (IAB) estimated in its ”2021 Video Ad Spend & 2022 Outlook” that domestic ad spend on CTVs and devices would hit north of $21 billion in 2022. This represents an increase of $6 billion, or 39%, versus the prior year and a staggering jump of $21.1 billion (2,086%) from just two years prior.
That can be anticipated to keep growing in the coming years. EMarketer estimated that CTV ad spending in 2022 would be 6% of the total U.S. media advertising market in 2022, growing annually to reach 9% by 2026.
This will be due to a number of different viewing formats and options that are included beneath the CTV umbrella. Connected TV includes any type of ad-supported streaming, free or subscription; streaming of broadcast or cable TV channels via either MVPD/VMVPD service apps or individual network apps that require service authentication (formerly “TV Everywhere”); and revenue generated from subscribing to a service via a CTV interface.
This is typically noted as “platform revenue” for such services as Roku and Vizio. Both services have seen tremendous growth in the last few years in platform revenue, with Vizio increasing by 126% since Q4 2021 and Roku up by 55% in the same period.
This points to four things occurring across CTV: an increase in time spent streaming; an increase in both the amount of money being spent on subscription streaming services and the number of services subscribed to; and the increasing acceptance of advertisers for the format.
Within the next two to three years, CTV ad spend will outstrip traditional TV. The only question is when.
Read more of VIP+’s trends assessment:
• Why PlayStation is soaring despite dipping games spend
• Coming March 22: The state of the social media space
Plus, dive into the expansive special report …
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