Connected TV Advertising Prices Are Falling Thanks To A Deluge of Streaming Services - The Average Joe

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    Connected TV Advertising Prices Are Falling Thanks To A Deluge of Streaming Services

    Noah Weidner

    June 14, 2024

    What makes more money: a premium plan or an ad-supported plan? Netflix ($NFLX) says ads, but that was before Amazon ($AMZN) came into the frame. Over the last few years, video streaming platforms Hulu ($DIS) and Netflix have embraced connected TV advertising (CTV) — unlocking a lucrative revenue stream while offering consumers a more affordable way to watch their favorite shows. However, one new entry is reducing prices in the CTV market — and jeopardizing the entertainment business’s cash cow.

    • In January, Amazon announced it would enter CTV, adding ads to Prime Video in an effort to expand its fast-growing advertising business with affordable costs (CPMs).
    • Since then, Prime’s lower costs and large advertising inventory have “upended” the CTV business, “driving down ad prices for everyone.”

    Brought to you by Amazon: Other streaming services have reduced pricing to compete with Prime’s $30 CPM. Dramatically, Netflix’s ad rates are down 23.8% year-over-year. This could lead to price hikes for ad-free customers, but the rapidly expanding CTV market might help streamers avoid that outcome. According to eMarketer, CTV spending will push $30B this year and is expected to grow at a 20%+ rate for the next few years. This means there should still be plenty of money to be made on the internet’s most valuable new stream of real estate.

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