Sep 13, 2017

TV advertising projections reduced due to increased cord-cutting

eMarketer has reduced its estimate for TV advertising spending in the U.S. this year by nearly $1 billion due to an uptick in cord-cutting, or people ditching their expensive cable bundles for cheaper streaming options.

Why it matters: The trend reflects consumers switching from bundled cable packages to more affordable, niche bundled services that can be accessed on TV box tops or on mobile. YouTube TV and Hulu TV launched within the past year, joining the likes of Dish's SlingTV, Sony's Playstation Vue and AT&T's DirectTV Now, all at a roughly $40 monthly price point — a bargain considering the average American pays $92 monthly for cable.

Data: eMarketer; Notes: Pay TV viewers have access to traditional TV service, excluding streaming. Non-pay viewers either quit their service or never had access. Chart: Andrew Witherspoon / Axios

The group predicts that by 2021, the ratio of Pay TV viewers to non-Pay TV viewers will drop from 4:1 to nearly 2:1.

It also expects TV advertising spending to increase only by .2% this year, around half of its previous annual growth rates in non-election, non-Olympics years. As a result, it estimates that TV's share of total media ad spending in the US will drop from 36.6% to 34.9%, and is expected to fall below 30% by 2021, as mobile advertising becomes the dominant advertising medium in the U.S.

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TiVo unveils its (tiny) new video streaming device at CES

Photo: TiVo

TiVo at this year's CES show in Las Vegas unveiled a new low-cost device that would compete directly against the likes of Roku and Apple TV, marking a pivot to what the company says is its future.

Why it matters: When TiVo debuted its iconic digital video recorder 21 years ago at this very same gadget trade show, recording video and skipping commercials marked a revolution in consumer control over how and when to watch TV. But things have greatly changed since then.

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The Olympics and the 2020 election are saving next year's TV advertising sales

Data: MAGNA Advertising; Table: Andrew Witherspoon/Axios

If it weren't for the Olympics and the election next year, TV advertising sales would be down again next year, according to MAGNA, an advertising firm.

Why it matters: Engaged live audiences have become a commodity for advertisers, and they are willing to spend big.

A record number of original TV shows were created in 2019

Reproduced from an FX Networks Research report; Chart: Axios Visuals

A whopping 532 original scripted television series were created last year, according to the latest data from FX Networks Research, up 7% from the year before.

Why it matters: The new data suggests that "peak TV" hasn't happened yet.

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