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The battle for world TV domination and other CTV predictions for 2022
December 9, 2021
Here’s one prediction you can always take to the bank: People love their screens and converged TV (CTV) will have a banner year. More than 200 million people connected to the internet via a CTV device at least monthly in 2021 and that number just keeps rising. Of course, traditional TV is still here too and will be for some time: 71% of US households still have a pay TV subscription. And that number is unlikely to drop below 30 to 40% this decade, if at all. That means we’ll be living in a dual distribution world for the foreseeable future.
Mediaoocean recently hosted a virtual event “The Big Picture: The Converged Future of TV+Video” and brought together industry leaders to explore the forces shaping a rapid convergence of linear television, connected TV, and digital video, along with solutions for managing cross-channel campaigns. The conversation was decidedly future-looking, and featured some noteworthy predictions from guest speaker Joanna O’Connell, Principal Analyst at Forrester, and our host, Alan Wolk, Co-Founder and Lead Analyst at TVREV. As we turn the page toward 2022, we thought these in particular were worth highlighting.
The clash between digital and TV mindsets will continue.
“It’s been happening for years and will continue in 2022. We saw a real move toward more kind of outcome-based talk in TV and video over the last few years but it’s still messy. Digital understands the idea of outcomes and measurement, but that's just contrary to the legacy TV mindset and the data infrastructure isn’t fully ready to support it. Now that doesn't mean that you're not seeing this move toward more outcome-based thinking and actions—you absolutely are. But it is a perfect example of when the old bumps up against the new and there is sort of a clash of culture.” – Joanna O’Connell, VP and Principal Analyst, Forrester
When buyers and sellers work together, everybody wins.
“There's so obviously a clear need for closer collaboration between buyers and sellers, where it's evolving from, an arm-wrestling adversarial kind of relationship to more of a kind of joint effort: How to take the content, the distribution mechanisms, the data assets of these media conglomerates and point them effectively toward advertiser's objectives in a way that creates sustainability for these media conglomerates. The challenge of course, is that we are in a world where we're seeing more and more organizations, more publishers, media companies erect tighter walls around their assets. And it's creating some tension here when buyers are looking for ways to manage things more holistically and they're facing this sort of growing walled garden phenomenon. So the question becomes how to synchronize in a walled garden world. It’s clear to us that folks that are really thinking about how to solve some of these process questions across different kinds of media are going to be in a good position because they're going to create a more frictionless process for buyers making this transition.” – Joanna O’Connell, VP and Principal Analyst, Forrester
The smart TV ecosystem is ascendant.
“All of the major smart TV OEMs, including Samsung, Vizio, and LG, as well as Roku, have their own FAST (free ad-supported streaming TV) services, their own measurement, their own advertising. And whoever controls the interface is going to control TV. So people are going straight to the interface and smart TVs have really improved this way. The interface used to be a pretty bad experience. Now it's a much easier experience, much easier to navigate. And that's going to be the role the multichannel video programming distributors (MVPDs) have on cable. This is going to be the role of the smart TV OEM on streaming.” – Alan Wolk, Founder and Principal Analyst, TVREV
MVPDs will start to unbundle the bundle.
“MVPDs (multichannel video programming distributors) make the bulk of their money off bundles. These days, selling broadband covers the cost of the pay TV service but for how long? It's expensive. It's a hassle. And we think some of them are going to say, we're out of it. You want pay TV, we've got a deal for you with Hulu or with YouTube TV or Sling. But others are going to start creating bundles out of the streaming service that the SVOD (subscription video on demand provides. And maybe sports too, although that’s not going to happen for a few years. But MVPDs are already asking: What do we do when our subscribership reaches 30% or 40% of total U.S. households?” – Alan Wolk, Founder and Principal Analyst, TVREV
The next battle is world domination.
All of the major U.S. players are moving overseas and that's going to be tricky. Because in the rest of the world, people don't always have $10 a month for Netflix and $15 for HBO Max and whatnot. We think that the FAST services are really going to have a big advantage as they move overseas or that the various services in the U.S. are going to have to introduce a lower price model, which is something Netflix has already started to do, where they have a mobile-only version. And they may even have to go lower than that and introduce a free ad-supported model, maybe not Netflix, but some of the other players to gain traction. TV is going global, and that's really where the next big battle is.” – Alan Wolk, Founder and Principal Analyst, TVREV