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Streaming, no doubt, is now completely mainstream, as the days from yesteryear of being limited to a broadcast network schedule are becoming increasingly obsolete. In 2020, streaming became the most common way for Americans to consume video. More households now use a streaming service than subscribe to cable (which continues to diminish by a rate of 4% to 5% each year). By 2026, ad-supported Video On Demand (AVOD) revenues are predicted to nearly triple the levels from 2021, reaching an estimated $31.4 billion (according to C21 Media).
Fast forward and streaming is rapidly accelerating in viewership and in media investment, according to the results of the 2022 Audience Insights For Brands report from Tubi and Fox (via survey research from MarketCast, which specializes in market research, data analytics and fandom). At present, and citing the report, a total of 82% of U.S. broadband connected households are streaming – from TV and movie content delivered over the top (OTT) independent of cable (versus 70% who watch pay TV). How content is now consumed, of course, has impacted how media planners and advertisers allocate their budgets.
“For many audiences, Streaming is TV,” quoting the 2022 Audience Insights For Brands report. “Streaming is here to stay. Streaming is setting an entirely new menu and inspiring consumer appetites.”
“OTT is simply part of consumers’ day-to-day lives, with streaming more often than not the immediate destination for the plethora of content available,” noted Mike Tankel, partner/optimist at marketing and development firm To Be Continued. “Not only are we digitally native, we are also OTT native and that affords us the ability to watch what we want, when we want, and where we want as we are no longer beholden to a schedule.”
“For an advertiser in the AVOD space, the convenience of streaming offers inherent advantages for marketing, where a message can be conveyed in a multitude of ways,” he added.
As we gear up for NewFront (digital) and upfront (linear) selling season, Connected TV (CTV), which can target specific audiences and measure outcomes directly tied to campaigns, is the fastest growing longform video channel in the marketplace. The critical praise and awards often bestowed on the streaming services is certainly a bonus (and the closest thing we have to the so-called “watercooler” buzz these days; now, of course, replaced by social media). The end result: advertising budgets are expected to keep shifting to streaming/addressable buys.
Specifically, the predicted year-to-year growth in CTV/OTT spend this year is 34% (versus the 7.4% for national broadcast and cable ad spend). A total of 66% of advertisers plan to increase their CTV advertising budgets. And the upfront streaming ad spend commitments are estimated to grow another 32% in 2022.
From SVOD (Subscription Video on Demand) to AVOD
While the underperforming audience data pertaining to the broadcast networks from Nielsen Media Research only magnifies the acceleration of the streaming services, where exactly the audience is going to fulfill their content needs outside of these traditional linear platforms is also shifting.
According to the Tubi and Fox report, the audience for free streaming is predicted to grow larger than paid streaming in 2022, which cites the determining factors in the shift as a) ubiquitous hardware; b) cord cutting; c) subscription fatigue; and d) increased broadband access. Specifically, President Biden’s recently passed infrastructure bill is expected to rapidly increase AVOD’s market penetration. By 2024, over half of all Internet users are estimated to use an AVOD service. And, in 2025, the free streaming services are predicted to outnumber pay TV viewers.
“The online MarketCast survey interviewed over 6,000 people (over age 18+) and looked at what were the biggest drivers of consideration and barriers to use for a service,” said Karl Dawson, Vice President of Audience Research at Tubi. “Content, ease of use, and user experience were in the top three across affinity, consideration, intent to use, and likelihood to recommend.”
“Consideration, ease of use and user experience ranked higher than even the content,” he added. “People are afraid of being bushwhacked, walking into something that might be confusing, or a hassle. At Tubi, whether or not you are logged in you can get straight to any piece of content on our platform, and the entire service is readily available whether you are on the web or have the app. We strive to make it simple. We care deeply about ease of user experience.”
Tubi as an Option
Launched in 2014 and acquired by Fox Corporation in 2020, the catalog of over 40,000 titles at Tubi – from movies and TV series; scripted and non-scripted; current and past from over 250 content providers – includes action, drama and comedy, Black cinema, LGBTQ+, cult classics, documentaries, horror, sci-fi, westerns, foreign language films, nostalgia, and news. Specific programming buckets include Tubi Kids, Tubi en Español, News on Tubi and Sports on Tubi. And, the growing emphasis at Tubi is on original content.
As an advertising investment, Tubi (and AVOD in general) is now a key consideration. In a recent study commissioned by Tubi with Advertiser Perceptions in July 2021, 56% of marketers rated the cost effectiveness of a streaming investments as a 9 or a 10 (on a 10 point scale). The ability to target incremental viewers that are difficult to reach on linear is cited as one benefit, as were incremental reach, a large and relevant audience, and the flexibility to advertiser with brand safe content.
“We have different initiatives and waves of content every month that may appeal to certain groups more than others,” noted Tubi’s Dawson. “And we can see where people tune in and tune out and, accordingly, we make decisions about our content and our marketing in order to best serve the entire audience. There are themes across the year that will focus and highlight on those efforts.”
“We have always said we have something for everyone at Tubi,” he added. “But as more people across the age, education and income spectrums come to the service, we are paying even closer attention to each distinct consumer to offer content that is most relevant and entertaining for them.”
One in five Tubi streamers are in households with annual incomes of over $150,000, according to the 2022 Audience Insights for Brands report. And, while Tubi’s average age is more than 16 years younger than that of linear television, 29% of all streamers are, on average, over 55 years of age, and adults 35+ now comprise 61% of Tubi streamers.
“Although AVOD adoption has hit scale across the nation, our research shows that people are picking only one or two AVOD services to watch from on a regular basis,” noted Dawson. “At Tubi, there are many ways people find us. There is hardware and software distribution and discovery, where people find us based on content, and top free movie and TV app recommendations. We have a vast library of content. And convenience is a huge plus, since people can access our content wherever they have an internet connection.”
The ability to binge view, avoid ad fatigue and enjoy a frictionless user experience at Tubi is our goal,” he added.
