Traditional TV networks are focusing on multichannel ad campaigns as a means to boost revenue in the near future. While the compound annual growth rate (CAGR) for total US TV ad revenues between 2016 and 2021 will increase a modest 1.3% to $75.2 billion, most growth will come from multichannel ad revenue, like IP-based streaming content or online video ads. PricewaterhouseCoopers’ (PwC) annual global “Media and Entertainment Outlook,” released Tuesday, found that multichannel ad revenue between 2016 to 2021, in comparison to total growth, will have a stronger CAGR of 2.6%, to $30.2 billion.
However despite its growing interest in multichannel advertising, TV networks have to face new challenges as they shift their ad content onto digital and OTT sector. While traditional TV content providers may have lured TV viewers to they minimal bundles and on demand libraries, they face harsh competition from online platforms such as Facebook, Twitter and YouTube all of whom are making their own deals with content providers for the limited slots that are available. Moreover, these MVPDs must also compete with video-on-demand services that have limited or no ads, like Netflix and Amazon Prime. And consumers are increasingly growing tired of sitting through traditional commercial ads.
“As a user, you get the ability to essentially opt out of an ad on YouTube by skipping it, but what kind of change does that drive when, as a user, you move back into standard, terrestrial TV or a subscription, VOD environment?” said John Swadener, chief operations officer and lead partner for PwC Experience Consulting.
Consumers are certainly viewing content; however they are opting to do so on ad-free subscription services and mobile apps, not in front of a standard TV screen. And the lack of an effective means of cross-screen measurement means a lot of views still go uncounted.
“Those four and one-half hours and six minutes of live TV per day was in addition to 37 minutes of time spent on the internet using apps or browsing the web,” Swadener said. “There’s a lot of time being spent every day in front of TV content.”