VIP+ Analysis: With streaming ads poised for rapid expansion, the move will hasten advertisers’ exodus away from cable almost altogether.
Comcast jettisoning most of its cable networks will likely accelerate the migration of ad dollars to streaming There is very little upside for advertising on cable networks separated from the NBCUniversal machinery CTV’s growth cannot come fast enough to offset linear’s declines, but the format remains on track for a banner 2025 Last week could very well mark the point when the migration of ad dollars from linear TV to streaming began accelerating to terminal velocity.
most of its NBCUniversal cable networks carries a number of profound implications for the media business, but especially significant is its potential impact on the video ad market. With the next few years already poised to become anfor connected TV formats, this new transformation of the linear ecosystem is likely to hasten advertisers’ exodus away from cable almost altogether. The trend is already inexorable, of course. S&P Global Intelligence data projects U.S. cable ad revenues to fall 4% year-over-year in 2024 and 3% in 2025, as well as to drop below $20 billion by 2027 ., the Comcast spinoff “is likely to create two smaller companies with opportunities less vast than those of competitors … In the past, NBCU could use its big-tent sports broadcasts, primetime schedule and late-night array to spur sponsors to buy some cable for additional ballast. Now, cable will be all alone.” And all alone with a declining audience at that. What will be left to attract advertisers to platforms shedding viewers at an ever-accelerating clip, with desirable content either falling away entirely or seeing its audience migrate to streaming? Bravo, the lone NBCU cable network not being spun off, will see a 5% drop in subscribers next year, per S&P Global data, with viewership for its still-popular content now being fueled by Peacock instead. There is, in other words, very little upside for advertising on cable networks separated from the NBCU machinery, and the change could set a template for other media giants to divorce themselves from at least some of their cable operations. Comcast leadership has made no secret of the fact that the new “SpinCo” will need to partner with more companies — or “play offense in a changing media landscape,” as Comcast president Mike CavanaghAmazon’s expansion of CTV ad inventory via Prime Video this year has already pushed down the cost of advertising on AVOD, with the average CPM among the biggest U.S. streamers projected at about $31 for Q4, versus more than $35 at the start of the year, according to eMarketer data. And those costs are expected to fall further, with the average dropping to less than $29 by Q2 2025 in eMarketer’s forecast. Meanwhile, the audience for ads on streaming continues to expand. Netflix’s latest periodic update on the state of its AVOD business revealed the ad tier now reaches?) that nearly a third of the Mouse House’s global streaming subscribers — 37% in the U.S. — are on ad-supported plans, with a whopping 60% of all new U.S. subscribers opting for the ad tiers.… was actually designed to move more people in the AVOD direction, because we know that the and interest in it from advertisers in streaming has grown,” Iger noted. That interest will only increase, of course, with the innovative ad formats unique to streaming continuing to expand as well. Warner Bros. Discovery just announced anto Prime Video, part of its plan to ramp up the ad loads on the service over the next year. And that’s not to mention another bombshell development in the CTV space last week: The Trade Desk finally confirmed rumors that the programmatic advertising giant is building its ownThe arrival of TTD’s “Ventura” OS has potential to reshape the CTV ad ecosystem, should the company’s visions of a more transparent and streamlined marketplace come to pass. If indeed the OS succeeds at simplifying theannouncing the OS promises “a much cleaner supply chain for streaming TV advertising, minimizing supply chain hops and costs — ensuring maximum ROI for every advertising dollar and optimized yield for publishers.”) CTV, in short, is already poised to accelerate its ascendant trajectory, but the now-hastened decline of cable will only result in ad dollars migrating to the format even faster. When the history of this tumultuous transition is written, Comcast’s decision to split off its networks may well be cited as the tipping point.
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