Take the scenario that Emily Todd VanDerWerff at Vox calls “topsy turvy:” Fans of the Netflix sitcom One Day at a Time hope a broadcast network will pick up the show after the streaming giant canceled it.

More broadcast networks are launching streaming platforms to make it even more interesting—think FOX NOW and Peacock.

It’s “just a sign of the times,” according to VanDerWerff. “The streaming revolution, which promised to break down lots of barriers in the TV industry, is beginning to morph into something else.”

It’s morphing into a giant. According to Kantar, more than 113 million households accessed streaming services as of September 2022.

Advertisers have responded.

By 2026, spending on connected TV (CTV) ads is expected to reach nearly $39 billion, up from $6.4 billion in 2019.

Part of that evolution has shaped over-the-top TV (OTT) partnerships.

For example, customers buying Verizon’s +play aggregator can get a free year of Netflix Premium. 

As the streaming wars intensify, partnerships like this will be common to attract advertisers and consumers alike.

Bundling is Not a Thing of the Past

VanDerWerff compares these partnerships to the cable bundling that was born in the 1980s. 

And they may continue to define the ‘new-and-improved’ TV landscape in response to so-called subscription fatigue.

“Even people who work for the streaming networks understand that having a bunch of streaming networks, all with their own unique and in-demand programming, all asking you to pay between $10 and $20 per month, could end up being catastrophic to consumers,” VanDerWerff concludes. 

While more than half of Americans pay for more than one streaming service, there is a line they won’t cross. We know that because there’s backlash whenever a major player increases its price.

Netflix, for example, lost nearly a million subscribers in Q2 2022. While the root cause of that decline goes beyond price—content and an increasing number of alternatives had much to do with it—price played a role.

It’s worth noting that Netflix is back to its growing ways, adding 2.4 million subscribers in the third quarter of 2022. That said, introducing ads to its platform could push some users away as Netflix optimizes its ad strategy and potentially increases ad loads to drive revenue.

Nevertheless, companies and streaming platforms must work together to remain appealing to consumers. 

“The way telecommunications companies react to OTT content and communications will either be the key to their continued relevance or signal a never-ending decline in market share,” writes Kevin Cancilla at Vindicia. 

The Enemy of My Enemy is My Friend?

These new partnerships are tenuous at best, primarily since they are born out of necessity.

According to Brett Sappington at Ecommerce Times, several factors have driven the push for these partnerships: “High fragmentation of content, the success of bundling, polarization in subscriptions and revenues, a low cost threshold for survival, and low awareness of OTT service brands.”

At the root of each of these factors is the consumer drive for accessible content. If you don’t offer it, your competitor certainly will. 

Take Hulu and Spotify.

Bundling the TV and music streaming services was surely a way to stave off competition from Apple. Hulu offers TV, Spotify offers music — Apple will offer both in the form of Apple Music and Apple TV+.

In the same vein, the partnership between Verizon and YouTube seems to be a way for YouTube TV to maintain (or grow) market share and for Verizon to appeal to content-focused consumers. 

“The deal underscores Verizon’s ongoing efforts to play nice with third-party content providers to continue enhancing the array of services that consumers have to choose from at Verizon,” writes Ingrid Lunden at TechCrunch. “More options for content helps sweeten the deal and keep people from moving to other services, or away from any bundles at all and opting to create their own a la carte selections, cord-cutter style.”

Both examples of new OTT partnerships highlight what the future of streaming TV is shaping up to look like: Consolidated and fiercely competitive—and that’s ultimately good news for everyone involved, including advertisers.

For more insights, sign up for MediaRadar’s blog here.

Today’s entry in the countdown: nine top OTT spenders. 

2020 saw an increase in both the number of streaming services and the size of their respective audiences. As a result, brands began to incorporate ad-supported video on demand (AVOD) channels in their media mixes. The channel is still nascent, but as ad-supported OTT becomes more mainstream and people cut their cable subscriptions, it will be important to pay attention to the brands experimenting with this new advertising channel.  

At the beginning of the year, MediaRadar began tracking OTT advertising. Soon, we will be releasing a new report on OTT and TV Everywhere. It digs deep into the biggest buyers and trends shaping this ad space. Subscribe to get the new OTT trend report in your inbox when it’s published.

For now, here’s a snapshot of the top 9 spenders on OTT. 

9 Top Spenders in OTT Advertising

OTT is a relatively new advertising format, but 2020 provided an ideal landscape for advertisers to increase their spend in this area. As brands look to it as an alternative to other digital spending, it’s reasonable to believe that the OTT space will only continue to grow.

The nine big spenders listed below have a head start in reaping the benefits of OTT.

GEICO Insurance

GEICO, the second-largest auto insurer in the US, dove into OTT advertising this year. Some industry experts expect auto insurers to benefit significantly from the pandemic, and GEICO clearly hoped that that would be the case.

Some carriers have offered rebates and rate cuts to reflect users’ decrease in driving time due to stay-at-home orders and shelter-in-place mandates. Though providers offer lower prices and have less revenue coming in, the industry as a whole is more profitable when people drive less and get in fewer accidents.

Part of GEICO’s advertising strategy may have been influenced by the lack of live sports. GEICO boosted ad spending on OTT when sports were suspended back in March. When the NFL returned in September, GEICO OTT ad spend fell as dollars shifted back to linear TV.

OTT only represents 1.6% of their advertising spend, but that small percentage still places it at the top of OTT spenders when translated into dollar amounts.

T-Mobile

T-Mobile was another big spender in the OTT space. This is likely due in part to their acquisition of Sprint Corporation in April—the deal had been in the works for a while, but was still notable.

Even before the merger, T-Mobile was vastly outperforming others in the industry, which could be the reason they felt comfortable spending so much on OTT advertising or the result of their investment in OTT.

The Home Depot

Home Depot invested in OTT advertising space this year, mirroring increased store traffic due to a surge in home remodels during the COVID-19 pandemic. It turns out that people put more effort into making their homes the way they want them when they’re forced to spend more time there.

Home Depot also spent over $1.3 billion on increased employee benefits during the pandemic and aided in supplying resources such as N95 masks to frontline healthcare workers.

AT&T Mobility

AT&T struggled in 2020—keeping up with the 5G network craze and struggled to profit as much as expected with HBO Max. Despite this, they were one of the top spenders using OTT advertising.

Analysts at Trefis expect their work to pay off. In comparing AT&T’s performance in 2020 to their performance during the 2007-2008 financial crisis and taking into account their current strengths and the expected rise in popularity of HBO Max, analysts predict that their earnings will rise with time.

Noom

Next up is Noom, who brands themselves as a long-term health solution. 

Noom was particularly well suited to the market in 2020 as many individuals looked to better themselves during lockdown and even more had a heightened concern for their long-term health.

Noom increased their advertising across all channels this year, except print and events (which they did not spend any money on in 2019 or 2020). According to MediaRadar data, OTT made up 5% of their marketing mix. 

NerdWallet

People seeking financial guidance and education during the shaky financial climate this year turned to Nerdwallet. With many facing unemployment or decreased hours due to the pandemic, there was a high demand for personal finance solutions.

The company continues to target those looking to save by providing specific guides and blog posts related to COVID and spending, such as 5 Minimalist Tips to Make the Holidays More Affordable.

Verizon Wireless

Verizon, like AT&T, also put significant effort into continuing to grow the 5G network. At the same time, they managed to stave off the more drastic effects of the COVID-19 financial crisis based on their wireless network. 

With more people working and attending classes from home, strong wireless connectivity increased in importance. Verizon capitalized on this demand and spent on OTT advertising.

Liberty Mutual Insurance

Liberty Mutual, another insurance company with plenty to offer customers during a time of stress and fear, sought to make themselves known on OTT platforms.

Despite high catastrophe losses of almost $1 billion—due to COVID-related events, the west coast wildfires, and major hurricanes—Liberty had high Q3 earnings and attributes their success to strong investment income rebounding after March lows.

Zillow

We’ve written before on the impact COVID-19 has had on the real estate industry. With the housing market still going strong, it makes sense that Zillow would work to stay at the forefront of their audience’s mind.

Zillow is uniquely situated within the real estate industry because they are not location-dependent, meaning that the various areas in which home sales have increased (mostly in the suburbs) all have the potential to benefit Zillow.

If you want more insights on OTT spending, we highly recommend you check out our upcoming trend report. The report offers more in-depth analyses of buying patterns across industry segments on ad-supported OTT platforms. Read past trend reports and subscribe here. 

Up next in our 12 Ads ‘Til New Years series will be: 8 Biggest Mergers. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

It’s a big month for streaming. Apple TV+ just launched and Disney+ is coming soon (but not to own on video & DVD). It’s time for an update on the state of the streaming wars. 

In this strange new world, tech companies like Apple are investing in content and media companies like Disney are investing in technology. So how does all this effort stack up? 

In August, the MediaRadar research team reported on the converging forces:

“After Disney announced earlier this year that it will launch its Disney+ streaming service in November, Apple announced that it is launching its own subscription-based video streaming service, Apple TV+. It’s rumored that Apple is currently spending $6 billion on content; $5 billion more than its original plan. In comparison, Disney is projected to spend $23.8 billion on content, Netflix is expected to spend up to $15 billion, and Amazon is on pace to spend $7 billion on video and music content in 2019.” 

Clearly, these numbers indicate that Netflix, Amazon, Disney and Apple are the royalty of over-the-top television (OTT). With the launch of HBO Max in 2020, AT&T’s WarnerMedia may join the exclusive club soon.

But consumers may need some convincing. The top seven streaming platforms will collectively cost $61. Consumers will more realistically pick and choose the platforms they actually want to pay for, leaving companies pitching both price point and content.  

Apple is going for a ‘quality over quantity’ approach, with just a handful of shows available on the platform. Disney+ is touting its massive library with everything from Marvel to The Simpsons (thanks to its recent 20th Century Fox acquisition). 

But all of this has to do with content spend, not ad spend. What does advertising an OTT option in an already crowded space look like? 

Apple and Disney Spend Big Ahead of Streaming Launch

For now, let’s look at the two headline makers: Apple and Disney. 

MediaRadar found that both platforms only started running ads in late August. Apple quickly overtook not only Disney’s ad spend, but the entire streaming space. It topped out ad spend in September, becoming the top spender among all streaming platforms.

To date, Apple TV+ has outspent Disney+ five times over. The platform did launch nearly two weeks ahead of the Disney counterpart, so the difference may be made up this month. 

The two companies differ in strategy, as well. Apple has been promoting its original content rather than the platform. So far, it has focused ad spend around eight shows in particular.

In contrast, Disney is promoting the new streaming platform as a whole, using clips from owned content to pitch the breadth of the platform. While not paid media, Disney posted a 3-hour-plus video on YouTube titled “Basically Everything Coming to Disney+”. 

On top of more traditional advertising, Disney has rolled out packaged deal after packaged deal thanks to its extensive holdings and powerful partnerships. For example: Verizon announced a year of free Disney+ for both new and existing customers, and more impressively Disney announced a $12.99 bundle with Disney+, ESPN and Hulu (both of which are majority-owned and controlled by house mouse). Apple, for its part, is including a year subscription to Apple TV+ with the purchase of any Apple product. 

Apple is almost on the defensive in this new world, playing against as a tech company against media giants like Disney. ““No one says the best movies come from Apple today,” MediaRadar CEO Todd Krizelman told The Los Angeles Times this week. “They have a real deficiency in terms of changing perception that they are a place where you should go to watch your content.”

In a bid to make that case, Apple has spent $20 million advertising its two biggest shows ahead of the launch. 

In contrast, Disney’s robust offerings, combined with constant messaging across Disney properties, may immediately drive Disney+ to the top. “Think of Disney like a giant pinball machine, with content and initiatives pinging between divisions in an effort to drive up the ultimate score,” Gene Del Vecchio, a marketing professor at USC, told The New York Times. 

But all of this is around the launch of new platforms. We’ll see what advertising spend does for the incumbents through 2020. 

Over-the-top TV kicked off 2019 with a bang when Viacom announced their purchase of Pluto.tv for $340 million. The deal allowed Viacom to delve into digital streaming without building out its own platform (a development made more interesting with the new ViacomCBS). 

But it also shows that rapidly expanding OTT is not just about Netflix, Amazon and now Disney+. There are a handful of successful OTT companies that have taken their share of revenue, sliver by sliver, largely by offering ad-supported streaming. 

As all the major players compete with content and pricing, these smaller, free platforms are looking to a classic value proposition: free. Will consumers take the bait? 

The smaller OTT players certainly seem to be expanding. Late last year, Digiday reported that free, ad-supported video streaming services were growing. 

Vudu and the retail advantage

Vudu, for example, launched its owner Walmart into the streaming wars. While the retailer has owned the OTT platform for nearly a decade, it has only recently added original programming and incorporating shopper data from the retail business into its ads. 

MediaRadar data shows that Vudu spent over $6 million in ad spend this year on both TV and digital ads. 

Xumo and the dedicated user

Xumo, another player making headlines, has made inroads in its own way. Earlier this year, Xumo reported 5.5 million monthly users and 300 percent YoY growth. The platform seems to be going for depth, rather than speed:

• MediaRadar found that Xumo has spent $2 million on advertising this year, with a heavy concentration on event-based spending. 
• According to Forbes, 1 out of 5 Xumo users rely on the platform exclusively for linear TV

Xumo may not need to dominate the TV world, but seems confident in finding a solid place inside of it,” concludes Howard Homonoff at Forbes.

Tubi and the big advertising splash

Another significant company in the race is Tubi, founded in 2014 and currently the largest independent video service in the US. 

While Tubi hasn’t had a significant digital ad spend this year, the ad-supported platform has made headlines again for its revenue and user growth in 2019. It also raised eyebrows with its somewhat racy OOH campaign lead by a pair of undeniably memorable notes:

| “Dear Netflix, I had my first freesome last night. Tubi was amazing.” |

| “Dear NYC, you free tonight? Because we are.” |

“A week after Viacom surprised the industry by agreeing to pay $340 million for Pluto TV, rival Tubi has announced several measures of its dramatic growth in 2018 and plans for expansion in 2019,” wrote Dade Hayes at Deadline toward the beginning of this year. Tubi had announced multiple plans to fuel this growth, including adding 40,000 hours of content to its library, plans for international expansion in 2019 and $25 million in growth capital. 

In June, the major-minor OTT player reached 20 million monthly active users. ““Tubi has made remarkable strides in the first half of the year, further demonstrating the vitality of [ad-supported platforms] in an environment fatigued by the amount of subscription video options,” CEO Farhad Massoudi told Deadline. 

Tubi arguably sets itself apart from other smaller players by focusing on quantity (though not necessarily over quality) and from other larger players by offering a free (ad-supported) medium for consumption. 

As these companies grow, the question is how will free streaming platforms continue to advertise themselves? 

Between some of the major entertainment mergers and media distributors launching their own streaming platforms, the shape of streaming TV is set up for some big changes in the near future. Who owns what will affect where people can watch what they want — and how advertisers can best reach them.

Disney+ Undercuts Netflix With an Impressive Catalog of Content

Disney+ was announced more than six months ago, but the buzz surrounding the new streaming platform hasn’t really died down. Adding to the anticipation is the announcement that Disney+ will be just $6.99 per month, undercutting Netflix (which is now $12.99 for the standard plan). The platform will launch in November; consumers and advertisers are both counting down the days.

Disney’s acquisition of most of Fox laid the foundation for this streaming service. “We can see what Disney’s ambition is with this $71 billion move: they want more of a buffet-style lineup that appeals to multiple demographics and holds name brand power,” writes Brandon Katz at The Observer. It’s a buffet-style lineup that will work perfectly with a streaming platform.

Business Insider outlines all of the major franchises and content that Disney owns after the Fox deal. From Pixar movies and Disney’s live-action remakes, to less family friendly favorites like Die Hard and Deadpool – it’s an impressive array.

To maintain its image while continuing to produce more mature feature films, Disney will most likely feature its branded content on Disney+ while pushing Fox content to Hulu. The diverse content will also mean Disney can rake in the advertising dollars on multiple platforms.

Netflix is Facing More Competition Than Ever Before

Netflix isn’t going anywhere. But with the streaming wars well underway, some of the most popular content on Netflix is under threat of being removed from the platform as the content owners become Netflix competitors.

Netflix faced fan backlash after announcing that the hit show Friends would be removed from the platform — AT&T was the new owner after purchasing Time Warner, and had its own streaming plans. After the social media response, Netflix negotiated a $100 million deal with AT&T to keep the show up through 2019.

What happens at the end of this year remains to be seen. Even if they do successfully keep Friends through 2020, Netflix will have another problem in 2021 when its licensing of The Office expires. The Office is Netflix’s #1 show by the number of hours streamed. But since it’s an NBC show, Comcast owns The Office and will be launching its own streaming platform shortly, setting up another headache for Netflix.

And for a future conversation: Netflix will have to face the challenge of competing with major platforms that have the distinct advantage of bringing in ad revenue.

Media Landscape in 2019: Larger Players With More to Offer

In their article for Vox, Rani Molla and Peter Kafka write on the increasingly blurred lines between distribution, content and streaming services. “The media landscape used to be straightforward: Content companies made stuff — TV shows and movies — and sold it to pay TV distributors, who sold it to consumers.” Now, everything’s up for grabs.

Netflix buys content and produces its own. Comcast, a distributor, will soon offer streaming, as will Disney, a content creator. The Vox article lays out the current state of the media landscape. “We’ve created a diagram that organizes distributors, content companies and internet video companies by market cap — the value investors assign to the companies — and their main lines of business,” the authors write.  

But more telling than the shape of the media landscape in this graphic is what Molla and Kafka write at the very beginning of their article: “It probably won’t look like this for long.”

For starters, when Disney bought most of Fox they also took over a majority control of Hulu. With rumors that Comcast may sell their 30 percent share to Disney and Hulu hanging onto its 10 percent stake it bought from AT&T, ownership of one of the biggest streaming platforms looks much different today than it did even a year ago.

With Hulu stakes changing hands left and right, Verizon building its own offerings and CBS making a foray into streaming video, many of these circles will grow or shrink. At the same time, Comca st and Disney will soon add a shade to their own pies as they add their streaming offerings.