WRITTEN BYย ALAN WOLK
Source: www.tvrev.com, April 2023


1. ๐—ฆ๐˜๐—ฟ๐—ฒ๐—ฎ๐—บ๐—ถ๐—ป๐—ด ๐—ฉ๐—ถ๐—ฒ๐˜„๐—ถ๐—ป๐—ด ๐—œ๐˜€ ๐—ช๐—ฎ๐˜† ๐—จ๐—ฝ, ๐—•๐˜‚๐˜ ๐—ฆ๐˜๐—ฟ๐—ฒ๐—ฎ๐—บ๐—ถ๐—ป๐—ด ๐—”๐—ฑ ๐—ฆ๐—ฝ๐—ฒ๐—ป๐—ฑ ๐—›๐—ฎ๐˜€ ๐—ก๐—ผ๐˜ ๐—ž๐—ฒ๐—ฝ๐˜ ๐—ฃ๐—ฎ๐—ฐ๐—ฒ.

๐™๐™š๐™–๐™จ๐™ค๐™ฃ ๐™’๐™๐™ฎ: ๐˜พ๐™ค๐™ฃ๐™ฉ๐™š๐™ญ๐™ฉ ๐™ข๐™–๐™ฉ๐™ฉ๐™š๐™ง๐™จ

Most of the inventory currently available on streaming is reruns of old network TV shows and movies. The big advertisers who spend hundreds of millions on image campaigns still see original series on network prime time as a more appropriate venue for their messages. The lack of standardization in just about every aspect of the business does not help, but it is not the main factor. This will change once the ad-supported arms of Netflix, Disney, Max, et al are more robust (figure two to four years) and advertisers view the originals on these SVOD services as the new prime time with FASTs being the new cable.


2. ๐—ฆ๐˜๐—ฟ๐—ฒ๐—ฎ๐—บ๐—ถ๐—ป๐—ด ๐——๐—ผ๐—ฒ๐˜€ ๐—ก๐—ผ๐˜ ๐—ฆ๐—ฒ๐—ฒ๐—บ ๐—ง๐—ผ ๐—•๐—ฒ ๐—”๐˜€ ๐—ฃ๐—ฟ๐—ผ๐—ณ๐—ถ๐˜๐—ฎ๐—ฏ๐—น๐—ฒ ๐—”๐˜€ ๐—Ÿ๐—ถ๐—ป๐—ฒ๐—ฎ๐—ฟ.

๐™๐™š๐™–๐™จ๐™ค๐™ฃ ๐™’๐™๐™ฎ: ๐™„๐™ฉ ๐™˜๐™–๐™ฃโ€™๐™ฉ ๐™—๐™š.

Linear TV is propped up by the tens of billions of dollars consumers pay in carriage and retrans fees, courtesy of the Cable Act of 1992. I say consumers, because while the MVPDs are technically the ones paying those billions, they pass on the costs to consumers in the form of higher cable bills. There are no carriage and retrans fees in streaming, and as such, streaming will never be as profitable, no matter how high subscription fees and CPMs go. This is not to say it will be unprofitable. Just not as profitable as linear.


3. ๐——๐—ถ๐—ด๐—ถ๐˜๐—ฎ๐—น ๐—ฆ๐˜๐˜†๐—น๐—ฒ ๐—ง๐—ฎ๐—ฟ๐—ด๐—ฒ๐˜๐—ฒ๐—ฑ ๐—”๐—ฑ๐˜ƒ๐—ฒ๐—ฟ๐˜๐—ถ๐˜€๐—ถ๐—ป๐—ด ๐—ข๐—ป ๐—ง๐—ฉ ๐—ฆ๐˜๐—ถ๐—น๐—น ๐—›๐—ฎ๐˜€๐—ปโ€™๐˜ ๐—ง๐—ฎ๐—ธ๐—ฒ๐—ป ๐—ข๐—ณ๐—ณ.

๐™๐™š๐™–๐™จ๐™ค๐™ฃ ๐™’๐™๐™ฎ: ๐˜ฝ๐™ž๐™œ ๐™—๐™ง๐™–๐™ฃ๐™™๐™จ ๐™™๐™ค๐™ฃโ€™๐™ฉ ๐™ฌ๐™–๐™ฃ๐™ฉ ๐™ž๐™ฉ.

Using all that data to target specific audiences on TV is a great move for DTC brands and certain types of retailers. Unfortunately those brands donโ€™t represent a huge portion of total TV ad spend. The brands that do spend hundreds of millions on TV each year generally have no interest in targeted advertising. As they see it, their audience is everyone with a mouth, everyone with an ear, everyone with a driver’s license. They run big budget awareness campaigns on TV to get reach. If someone outside of their desired target sees their ads, they donโ€™t view that as a bad thing as that person may help reinforce a purchase decision. Yes, they will sometimes spend money on targeted campaigns to support a specific initiative, but it will not be the bulk of their ad spend. And as TV data becomes more sophisticated, they will make much greater use of it to track effectiveness and impact, but the big spenders will always want massive reach.


Alan Wolk

Alan Wolk veteran media analyst, former agency executive, and author of “Over The Top. How The Internet Is (Slowly But Surely) Changing The Television Industry” is Co-Founder and Lead Analyst at TV[R]EV where he helps networks, platforms, agencies, brands and ad tech companies navigate the rapidly shifting media landscape. A widely published columnist, speaker and industry thinker who is a regular on Cheddar TV, Wolk has built a following of over 300K industry professionals on LinkedInย by speaking plainly and intelligently about TV and the media business.

https://linktr.ee/awolk