Global online video advertising to double in five years
Advertising revenue, partnerships and AI are crucial for reducing subscriber churn as pay-TV operators adapt to changing consumer preference, according to one of the sector’s leading researchers.
Maria Rua Aguete, senior research director, media and entertainment, at Omdia, concluded that “the future is hybrid” and forecast that ad revenue will more than double for online video over the next five years.
“Never underestimate the importance of bundling, the importance of partnerships,” she said. “People speak about the streaming wars — I speak always about the streaming partnerships.
“Being a partner with telcos is critical going forward; [it’s] one of the most powerful tools to reduce churn and no surprise: even the number one service in the world, Netflix, is out there always looking for telco partnerships to reduce churn.”
‘Everyone wants to be involved with advertising’
The number one source of online video revenue in 2028, by far, will be online video advertising, Omdia’s research has found.
After online video advertising overtook pay-TV subscriptions and VOD this year (each being worth about $200bn globally in 2023), video ads will be worth $327bn in 2028.
Aguete explained that online video ad revenue includes broadcaster video, as well as from Facebook, YouTube, other social media such as Instagram and free ad-supported TV channels channels (which would account for $12bn in 2028).
She added: “Looking at this figure again, you can see how high advertising is compared to pay-TV, compared even with online video subscriptions, [ads] will more than double. So that isn’t a surprise that everyone wants to be involved in one way or another with the advertising markets.”
Using AI to detect ad breaks
Aguete delivered a presentation about the state of pay-TV at The Media Leader‘s exclusive live webinar last week in partnership with Media Distillery: No Ads? Fewer Ads? Better Ads? How AI Will Supercharge Subscriber Loyalty and NPS.
As well as a discussion about the future of bundling as streaming services increasingly ink deals with pay-TV operators, the webinar examined how Media Distillery’s Ad Break Distillery helped Swisscom offer a new service, Reply Comfort, in which viewers could skip ad breaks when watching catch-up TV.
Philipp Wuethrich, head of TV and smart products’ backend software development at Swisscom, discussed how the service managed to help the Swiss pay-TV operator keep subscribers satisfied and engaged by impacting their user experience.
Martin Prins, head of product at Media Distillery, explained how Ad Break Distillery uses AI to detect ad breaks on broadcast channels without ad signalling.
The webinar is available on catch-up for free — all you need to do is register to watch.
Thanks to Media Distillery for partnering with The Media Leader to deliver this insightful discussion about the future of broadcast television and pay-TV. If you’re interested in delivering great content for our audience and the global media industry, contact [email protected].