OTT vs Television, the battle is ongoing in various forms and on various grounds, and advertisements are some of the major fuel keeping this battle alive. In the very beginning, OTT provided a change in the viewing experience, particularly in terms of advertisements.
The very first change came in the form of advertisement. Opposing Linear TV’s advertisement-filled user experience, OTT provided a subscription-based model with an advertisement-free experience. So, if a company managed to show an ad during any ongoing show on OTT, it would have been a big deal, and Linear TV still had the power of Advertisement.
But with time, the OTT space started to flood with sponsorships and ads. They also introduced an ad-supported plan, which eventually resulted in the decay of linear TV and bridged the gap between the two worlds.
Parallel to that, most TV channels started to stream the same content on OTT, with a similar experience as well. And during this time, as India experienced a major boom in smartphones and internet usage, OTT boomed because of Hotstar, the first platform to offer a similar experience.
For years now, it has been said that the peak television has ended. And the statement isn’t fundamentally wrong, as the quality did dip a bit, and OTT is now coming up with better and stronger shows. It’s also more accessible now because of smart TVs.
As quarterly results approach for Walt Disney, Warner Bros Discovery, and Fox, the narrative of media contraction intensifies.
Analyst TD Cowen predicts a 7% decline in broadcast and cable TV advertising for 2023, with Disney facing an overall 11.7% advertising decrease. Warner Bros Discovery reported a 13% advertising drop in the first nine months of 2023.
Looking ahead to 2024, Cowen anticipates another 7% decline in TV ad revenue. Despite media companies’ efforts to grow digital ad businesses, traditional TV remains the primary source, comprising 80% of total advertising revenue.
Even talking about profitability, the streaming platforms aren’t getting to that level anyway, as for most times, when the competition is at the pinnacle, nothing can sustain properly.
Even that loss-making strategy is being reflected in content production as well. Though a studio like Amazon is splashing more cash, fundamentally it doesn’t mean that they will be making more shows.
The quality does come into question as TV, over the years, has provided its iconic shows such as Breaking Bad and The Sopranos. So right now, OTT is definitely trying to replicate the path of Linear Cable as the latter tries to survive among the dip in advertisement money.
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