Pay TV and Cable Lost 5.8M Subscribers in 2022
by Frankie Karrer
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Everyone in the TV industry—from manufacturers to traditional powerhouses—are going all-in on CTV advertising
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This week marks the start of Comcast’s Watchathon Week, where they offer their Xfinity and Flex customers free access to premium channels they normally don’t subscribe to. Traditionally this has meant getting free previews of HBO, STARZ, and other subscription cable networks. This year’s Watchathon is a little different.
A number of streaming networks have been included in the usual list of premium cable networks. Both Xfinity and Flex customers will get access to Hulu, Peacock, and HBO Max alongside the usual suspects. Their addition is another sign that traditional powerhouses are embracing the new way people watch television—which is a good move considering how viewership trends have been shifting.
By promoting streaming as an option to their customer base, they’re acting as a conduit to Connected TV for consumers who may not have integrated streaming into their usual media consumption. If you can’t beat them, join them—and Comcast is ensuring they still factor in to a post linear TV world.
The writing is on the wall for Comcast’s pay TV services; Comcast had 19.85 million pay TV customers as of Q4 2020, down from 21.25 million just a year prior. This isn’t just them embracing a new way of watching television, it’s them getting in on what will eventually be the only way to watch for the vast majority of consumers.
Comcast has made a number of moves recently to help strengthen their Connected TV position. Comcast’s Freewheel recently acquired CTV ad supply chain firm Beeswax, helping them to bolster their CTV advertising logistics capabilities. The Watchathon move is a sign they’re ready to start bringing their robust (but shrinking) customer base over to Connected TV, where they feel they can plot a course for growth.
Samsung’s smart TV’s are going to be getting a little bit smarter, at least as far as ad strategy goes. They recently announced the addition of ad placements available via their CTV dashboard which comes standard with every smart TV they sell. Two of the placements will be for entertainment and media companies to promote their programming or services in the Samsung TV app store, however a third ad placement will be available to advertisers in general and be placed in a prominent spot on the home menu.
“Smart clients always want more space on the TV itself,” said Tom Fochetta, SVP of Samsung Ads, in an interview with Digiday. “Because we own the hardware and the operating system, we have the ability to create unique ad experiences so advertisers can engage their audiences, deliver interesting content and graphics.”
The ad will appear in the first thumbnail spot on the home screen menu; Samsung smart TV users are used to seeing content there, however now they’ll be greeted with an ad. “We almost train the users to go there,” Fochetta added.
This is an interesting move in terms of CTV advertising in general. While different from an ad that is served while viewers stream television, it’s going after those same viewers but through a different route. One that not only gets Samsung a piece of the exploding CTV/OTT advertising market, but one that allows advertisers to target CTV viewers who are turning on the television to watch subscription-based, ad-free streaming services.
The old adage “follow the money” applies here. When major players throw money, strategy, and business decisions behind something, it’s a good sign we’re out of the “pioneering” phase and getting more into the mainstream. It’s likely we’ll see more traditional powerhouses in the TV space making moves to claim their stake of a major opportunity.
This mirrors how advertisers are shifting priorities and focus when it comes to TV. eMarketer estimates show an expected 41% increase in Connected TV ad spend in 2021 alone, with the years following seeing even more money flowing into the channel. The surge in advertising spending, coupled with publishers’ and manufacturers’ eagerness to provide them ad space, indicates that we’re just seeing the tip of the iceberg when it comes to Connected TV’s dominance in media.
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