Ad Wars: The new battlefield for Streaming
S08E04: Game of Streams (Ad Wars: The new battlefield for Streaming)
As streaming giants like Amazon, Netflix, and Disney continue to expand their advertising capabilities, a new era of competition has dawned for traditional broadcasters.
Historically, platforms like Netflix prided themselves on ad-free content, a significant draw for subscribers seeking uninterrupted viewing. However, the landscape is shifting. With subscriber growth slowing and the need to bolster revenue becoming more pressing, streaming giants are now embracing advertising. Netflix's recent introduction of an ad-supported tier marks a strategic shift, aimed at maintaining its competitive edge and profitability.
Live sports
For streaming services, securing sports broadcasting rights is becoming a strategic necessity. This necessity is not just about the immediate advertising revenue but also about long-term subscriber growth and brand positioning.
Live sports broadcasting is not a new concept, but its adoption by streaming platforms is a game-changing strategy. Live sports offer something unique: real-time, engaging content that can attract masses of viewers simultaneously, a goldmine for advertisers who value the undivided attention of a large audience.
Amazon’s investment in sports, including exclusive rights to Thursday Night Football in the US has not only boosted their viewer base but also significantly enhanced their attractiveness to advertisers. Events like the NFL games on Amazon Prime not only draw large audiences but also create a premium advertising environment where brands are willing to pay top dollars for exposure.
A noteworthy, but not surprising, example of strategic sports investments is Disney's recent acquisition of broadcasting rights for the UEFA Europa League and the UEFA Conference League in Sweden and Denmark. This move is part of Disney's broader strategy to penetrate European markets, where football is immensely popular. By offering live broadcasts of these leagues, Disney+ not only hopes to increase its subscriber base but also to create a lucrative advertising environment.
The economic impact extends beyond direct ad sales, it includes increased subscriber engagement and reduced churn rates, both of which are critical metrics for streaming platforms.
This strategy underscores a significant shift in how streaming services are viewed: not just as entertainment portals but as holistic media platforms that can rival traditional broadcasters.
The traditional broadcasters
The increasing shift of advertising dollars towards streaming platforms presents a new problem for traditional broadcasters. The streaming platforms are not only a competition for the viewers, now they also compete for the ad money. The broadcasters must now innovate or risk obsolescence.
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However, this evolving market also presents opportunities. Broadcasters can leverage their established expertise in content curation and live event coverage. By enhancing their digital platforms, investing in better user experience, and adopting more sophisticated advertising technologies, they can create a unique value proposition.
This includes dynamic advertising using Server Guided Ad Insertion, interactive/shoppable ads and focusing on the localized targeted advertising opportunity.
As we look to the future, the integration of advertising into streaming platforms is likely to evolve further. We will see the emergence of new advertising formats that are less intrusive but more targeted, maximizing the revenue potential without detracting from the viewer experience.
As the streaming industry continues to evolve, staying ahead of these trends will be crucial for broadcasters and advertisers alike.
To watch out for the coming months…
In less than a month, Streaming Tech Sweden will kick off in Stockholm. Various sessions throughout the morning delve into managing extensive live sports broadcasts, the potential of LLMs in enhancing sports multimedia, the video codec landscape, anti-piracy efforts, and the technicalities of new Common Access Tokens.
Afternoon presentations include innovative advertising technologies for content monetization, challenges of ultra-low latency in unstable networks, collaborative insights into DRM in media streaming, and a practical guide on building a streaming test bed using open-source components. The event also includes a peek into the operations behind ITVX, emphasizing the complexity of running streaming platforms.
Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.
Follow me on LinkedIn and X (@svensson00) for regular updates and news.