Connected TV

Gnarly: Linear Viewership Numbers Are Now at ‘80s Levels

As traditional TV's influence wanes, top companies look to CTV for the new blueprint

Gnarly: Linear Viewership Numbers Are Now at ‘80s Levels

5 Min Read

Cord-cutting, once deemed a radical step taken by millennials, is now commonplace. Each year, more people are saying hasta la vista, baby to their cable packages (or reaching adulthood and never signing up for the service at all, aka the “cord-nevers”) in favor of Connected TV. As a result, content providers are taking a hard look at how they do business and what they can borrow from CTV’s business models.

Cord Cutters Keep Telling Cable To Eat Their Shorts

Linear viewership is in freefall and hasn’t shown signs of stopping. An important milestone was crossed last year: streaming viewership surpassed linear for the first time. Currently, 52% of Americans do not have cable, satellite, or telco TV, according to a report from Samba TV. To put this in perspective, linear TV viewership has fallen to levels we haven’t seen for over 40 years—that means cable TV subscriber numbers are now as low as they were in the 1980s. (Yeah, that Terminator reference earlier? That was foreshadowing.)

As Cord Cutters News recently highlighted, this was a time before cable programming had taken over; most households were tuning into the networks like ABC, CBS, and NBC…and not much else. Experts estimate that this number will continue to decline, with another 14% of cable subscribers projected to cut the cord by the end of this year. By 2025, 72% of Americans will no longer have cable TV of any sort.

Comcast, Once a Cable Purist, Announced a New Streaming Service

Cable subscribers aren’t the only ones rethinking their attachment to this model. Comcast is also reassessing how it delivers TV to its customers. The telecom giant recently announced the launch of a streaming live TV offering, which includes access to Peacock for just $20 a month. In the past, Comcast has been resistant to this type of discounting, saying their approach is “to not subsidize unprofitable video relationships.” But now they appear to have changed their tune: “With content and connectivity at the core of our company, we are uniquely positioned to build and deliver streaming entertainment offerings unlike anything else out there today,” said Comcast Cable president and CEO Dave Watson during the announcement.

This reversal was no doubt driven (if not mandated) by their Q1 earnings report, which illustrated just how dire the switch to streaming has become for cable companies. Comcast reported losing an average of 6,800 subscribers a day in Q1. Now it’s scrambling to figure out how to offer TV packages that align with the scale and price that streaming channels offer. To keep the audience they’re hemorrhaging, cable is looking to its successor for answers.

When It Comes to the TV Screen, YouTube is Following the CTV Approach

Even YouTube is taking a page out of CTV’s playbook. They recently announced a shift in their CTV ad offering: instead of two skippable 15-second ads, those watching YouTube Select content on Connected TV devices will be served a 30-second, non-skippable ad. A YouTube spokesperson highlighted that “this format also seamlessly fits into what viewers already expect and experience on the big screen.”

Once a platform associated with smartphones and desktop viewing, YouTube has also felt the seismic shift toward the TV screen. eMarketer reports that 45% of all YouTube viewership takes place on the TV screen, up from less than 30% just a few years ago. The new ad format policy specifically applies to YouTube Select content, which YouTube reports is mainly watched on the TV screen, to the tune of 70%. They too are following CTV’s lead to help amplify the living-room-focused viewing experience and to offer advertisers the kind of inventory they’ve come to expect on the TV screen.

CTV Means Choices for Viewers and Advertisers Alike

For a while there, advertisers buying on linear TV seemed not to notice how rapidly TV’s audience was shifting. Despite how many viewers were cutting the cord, brands kept on keeping on, following status-quo spending on linear advertising.

But the message seems to have finally hit home. According to eMarketer, “The ad spending gap is also narrowing. CTV accounted for less than 10% of traditional TV spending in 2019, but it’ll be near 50% in 2024. This means the TV advertising market is settling into a pattern where ad spending tracks with time spent (as it logically should). This was not the case for traditional TV in the decade leading up to 2019, when time spent dropped precipitously while ad spending increased.”

Connected TV has recaptured the magic of living room viewing, pulling viewers away from the small screen of their phones and returning them to the thrill of the bigger screen. It also gives them choices (albeit sometimes too many of those). Rather than being tied to an expensive cable package with hundreds of channels, viewers now pay only for the services they want—or consume ad-supported content for free.

On the (C)TV screen, advertisers get the freedom of choice, too. The targeting and measurement capabilities of CTV’s digital DNA allow them to not only reach their specific audiences but also measure the impact of their efforts. As advertisers flock to these better-suited solutions, it’s not surprising that other services are looking to beef up their offerings to stay in the game.