This Future of TV Briefing covers the latest in streaming and TV for Digiday+ members and is distributed over email every Wednesday at 10 a.m. ET. More from the series →
This week’s Future of TV Briefing looks at why advertisers are keeping an eye on streaming services’ ad product developments and ad loads.
- ‘Have you tried to watch streaming?’
- Streaming watch time hits new highs
- Meta’s & YouTube’s TikTok creator charm offensives, Bluesky’s & X’s video updates and more
‘Have you tried to watch streaming?’
As covered last week, Netflix didn’t exactly break new ground in its meetings with ad buyers during the Consumer Electronics Show earlier this month. But it did strike a nerve.
Coming out of the meetings, the agency executives I spoke to kept saying how excited they were by Netflix’s talk of innovation in its ad products. This was true despite the primary example of this innovation was a contextual ad product that Netflix isn’t formally pitching yet and is similar to Disney’s year-old Magic Words contextual ad product. But that’s kinda the point. Streaming advertisers appear pretty eager for companies to improve upon the streaming ad experience in seemingly any respect.
“I feel like we’re still trotting the same ground in terms of you still only get a number of seconds and sight, sound and motion and all that,” said one agency executive.
To be clear, there have been advancements in streaming advertising. But many of them date back to the before times, like when Hulu introduced the pause ad format in 2019. Or the appendage of QR codes, which were invented in 1994. Meanwhile, more and more people are tuning into streaming services with ads enabled.
In the third quarter of 2024, 43% of streaming subscriptions were for ad-supported tiers, according to research firm Antenna. Meanwhile, although streaming audiences’ tolerance of ads has increased over the past two years, so has the percentage of people who say they can’t tolerate ads, according to Hub Entertainment Research.
Of course, more people are willing to tolerate ads than those who aren’t, as the chart shows. But a growing concern among ad buyers is the potential for that tolerance to go down as the number of ads goes up. And the number of ads is going up as the various streamers’ ad-supported tiers gain scale, which has made it cheaper for advertisers to buy those impressions.
“If you look at what’s happening in streaming, CPMs are dropping because we’re getting more scale, but how are we getting that scale? Have you tried to watch streaming? The pods are like eight of eight ads, nine of nine, 10 of 10 – what is going on?” said a second agency executive. “So the idea that we’re actually innovating and moving to more respectful ad insertion in terms of the experience and the timing, I think, is how we’ve got to go.”
Which is why Netflix’s and Disney’s contextual ad products are piquing ad buyers’ interest. If the ads can be more relevant to audiences, then that may help to maintain audiences’ tolerance of ads. The trick then will be maintaining the amount of ads that streamers serve to audiences.
“As someone who watched the cable [TV] world effectively kill itself with expanding its ad loads for years, making some network almost unwatchable with the length of the commercial pause, it will not surprise me in the least when streamers start to increase their ad loads,” said a third agency executive. “It will be to their detriment when they overdo it, and it will drive viewers either away from ad tiers or away from a streamer altogether. But it will not surprise me when it happens.”
What we’ve heard
“We will work with President Trump on a long-term solution that keeps TikTok in the United States.”
Streaming watch time hits new highs
People in the U.S. spent a lot of time streaming movies, TV shows and live sports — and YouTube — in December. In fact, streaming’s share of overall TV watch time reached a new record in the month, according to Nielsen’s latest The Gauge viewership report.
Sports was the big driver of watch time in the month. For example, Netflix’s Christmas Day NFL games notched it a 14% month-over-month increase in watch time (versus 11% when excluding the two games). And broadcast TV and cable TV each recorded 17% and 29% respective month-over-month increases in sports viewership in December.
Streaming watch time, meanwhile, was up across the board.
Max received the largest month-over-month increase in watch time in December, with an 18% jump. And YouTube’s 7% month-over-month bump pushed it to a new high. By contrast, Hulu actually lost share in the month, though that seems to be a potential case of sibling cannibalization with people being able to stream Hulu within Disney+. Fox’s Tubi also shed share, albeit 0.1 percentage points. And Paramount’s Pluto TV stayed under the 1% mark.
Numbers to know
301.6 million: Number of subscribers that Netflix had at the end of 2024.
12: Number of hours, approximately, that TikTok was shut down for before reactivating on Sunday.
$50,000: How much money Instagram has offered to pay some top TikTok creators per month to post Instagram Reels.
6%: Percentage increase, year over year, in the number of film-and-TV production days in the Los Angeles area in the fourth quarter of 2024.
50 million: Number of people worldwide who have watched at least some of MrBeast’s “Beast Games” on Amazon Prime Video.
$70: Monthly subscription price for DirecTV’s sports streaming TV package.
13.8%: Percentage expected increase, year over year, in advertisers’ connected TV ad spending in 2025.
What we’ve covered
Here’s a guide for what marketers can do now with the back-and-forth of TikTok:
- TikTok may have resumed operating in the U.S., but possibly only temporarily.
- Marketers still need to sort out contingency plans, if they haven’t already.
Read more about TikTok here.
As TikTok teeters, YouTube, Meta, Snapchat and more race to claim its ad dollars with incentives, discounts:
- YouTube has been offering sweeteners to advertisers committing to spend on Shorts ads.
- Meta and Pinterest are offering to match advertisers’ spending amounts.
Read even more about TikTok here.
Comcast tempts DTC brands away from paid social due to rising costs and brand safety issues:
- Comcast’s Universal Ads product will syndicates ads across a network of TV networks and streaming services.
- The product is designed to woo small- and medium-sized advertisers.
Read more about Comcast here.
Twitch streamers lament likely loss of TikTok as an audience referral engine;
- TikTok’s “clipping culture” created an audience funnel for Twitch streamers.
- YouTube Shorts may be a more viable referral alternative for streamers than Instagram Reels.
Read even more about TikTok here.
Creators fast-track efforts to rely less on platforms amid intensifying TikTok uncertainty — here’s where they’re going:
- Substack and Tumblr have been some of the more surprising platforms trying to seize on TikTok creators.
- Some industry experts advise creators to develop their own owned-and-operated properties.
Read even more about TikTok here.
What we’re reading
Meta’s & YouTube’s TikTok creator charm offensive:
Facebook, Instagram and YouTube have been stepping up their respective efforts to pull short-form video creators to their platforms, according to The New York Times.
The X rival has added a vertical video feed in a bid to seize on TikTok’s short-lived absence in the U.S., according to TechCrunch
The text-centric social-platform is adding a video tab for U.S. users a decade after introducing native video support, according to Business Insider.
The U.S. regulator has updated the children’s privacy law to now require companies to obtain parents’ consent before serving targeted ads to children, according to Bloomberg Law.
Fox will stream this year’s Super Bowl for free on Tubi, despite emphasizing the free, ad-supported streamer’s primary viewing experience being on-demand, according to Variety.
