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How TV has reached a tipping point

Covid-19 has created a tipping point in consumer television viewing habits, most notably in the acceleration of the rush towards streaming services and connected television (CTV) and away from linear. It’s driven at least in part by the unexpected adoption of younger viewing habits by an older generation – something observers thought would never happen.

This is the major finding from the ‘How TV has reached a tipping point’ panel, sponsored by the Trade Desk, at The Drum’s Digital Summit. Acceleration, not transformation, was the panel’s verdict on the changes Covid-19 had wrought. Whereas CTV had been viewed previously as the preserve of the young, during the pandemic, their elders suddenly saw a point in purchasing smart TVs – or the young bought them for their parents as presents. The radical shift in digital systems means that 2020 represents that tipping point.

Watch the panel here.

Led by the success of Netflix, fundamental change has also taken place in the nature of the content created and consumed. ITV’s Holland acknowledges that it has forced this traditional linear channel to face up to change. The next year will see a renewed focus on its on-demand business unit and how programmatic content and what she describes as “cliffhanger content” fits within that new environment.

Sudden change is reflected in some remarkable statistics: CTV is growing 35% year on year. ITV itself has witnessed growth of 500% to ITV Hub, which now has a remarkable 32 million registered users. CTV users are now two thirds of those using Hub, which excites buyers about the possibilities of addressable and programmatic. Addressability, video on demand and large screen formats have all helped. To the viewer, of course, it’s all just TV.

It follows then, says The Trade Desk’s Ramsey, that advertisers are among the big winners of this radical shift in habits. Premium content with highly engaged viewers on media with huge reach is an advertiser holy grail. As consumers start using up the free trials by which they were attracted during the first lockdown, price becomes more of an issue. With research by The Trade Desk suggesting most UK consumers will not pay more than £10 a month for streaming, it is clear there is an opportunity for advertiser funded OTT and CTV services.

Ebiquity’s Polman sounds a note of caution, pointing to the current relative lack of transparency in measurement and ROI. The risk of fraud is still high and it is a complex space, he continued. But to entirely focus on this would be to overlook the great data opportunity that comes with, in particular, retargeting via a multi-screen environment, where everyone is in front of a TV but chatting with friends on their phones.

In the light of the legal and technical restrictions on mobiles and the growing lack of third-party cookies, Holland cites the growing significance of collating first-party data. When that runs to some 32 million ITV consumers, it becomes a very attractive proposition to buyers looking to align content buys with programming behaviours and more tailored messaging.

One worry about this brave new future is that with anyone from Amazon and Google to Roku and Samsung having their own DSPs now, there might be new walled gardens in the TV space. How would this help television fight back against the undisputed supremacy of Google and Facebook in their respective ‘new’ channels? The infamous duopoly can dominate access to their inventory. No one in the television space – not even Disney – can. Broadcasters need to open up their inventory to as many buyers as possible.

Polman argued strongly against the idea that CTV might go down the same ‘winner-takes-all’ pathway as search or social. Content is more central to the television offer, currently less dependent on the algorithm or tech. However, even Netflix would struggle if it had to allow advertising so as not to increase its subscription rate over that £10 barrier. Over 57% of subscribers said they would end their subscription if ads were brought in.

So for now, all were agreed, the pandemic has accelerated the speed by which buyers and advertisers have come to view the potential of CTV and VOD as very real, but mostly in conjunction with linear, not as an alternative. The immediate post-Covid future will be a time of test, test and test again, while simultaneously requiring much greater transparency form measurement systems. And, a reset of the previously held view that CTV was only for millennials.

Watch the fascinating panel here.