May 7, 2019 - Economy

Free TV makes a comeback

Illustration: Axios Visuals

Despite the continued growth of subscription video services like Netflix and Hulu, free ad-supported video services are making fresh headlines.

Why it matters: Free, ad-supported video gives companies the ad inventory to sell digital TV ads, which are seen as a lucrative opportunity for whichever publisher can really master the technology.

Driving the news: Several video giants announced at NewFront presentations this week that they would be introducing more ad-supported free video options.

  • Walmart's video streaming service Vudu introduced a lineup of free, ad-supported original streaming content at its first-ever NewFront presentation last week.
  • YouTube announced at its "Brandcast" event last week that it's making all of its original content available for free and supported by advertising.

Between the lines: Altice USA, a regional cable provider, announced it was buying over-the-top business news channel Cheddar for $200 million last week. The company's co-president & CFO Charles Stewart tells me the acquisition isn't a streaming play, but an opportunity to bolster its news and ads businesses, since advertising is the company's fastest-growing revenue segment.

By the numbers: Advertisers expect to spend an estimated $18 million on digital video advertising in 2019, with $9.3 million allocated to original content, according to new research from the Interactive Advertising Bureau.

  • Yes, but: Digital video advertising, while growing quickly, is still a tiny portion of the advertising pie in comparison to television.

Go deeper: Free apps are driving adoption of digital TV ads

Go deeper