The demand for free ad-supported streaming TV (FAST) has exploded over the past few years, with virtually no sign of slowing. Variety Intelligence Platform (VIP+) Analysis predicts that FAST ad revenue will rise from between $3.5 and $4 billion in 2022 to between $5.3 and $6.1 billion in 2025. Moreover, Amagi’s most recent consumer report found that nearly one-third of American households said they would cut their TV subscriptions first in an economic downturn, with almost two-thirds of that group saying they would switch to FAST.[1] The reason is simple: When subscription rates and pay-TV services chip away at already fragile consumer budgets, consumers will simply turn to platforms that stream their favorite content free-of-charge, yet with ad support.
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Advertising is a crucial source of revenue for video service providers. In 2023, global ad spend on TV and digital video is projected to reach $210.2 billion. Just as video providers look to increase advertising revenue, there is a simultaneous drive to achieve net zero carbon emissions by 2050. How does the TV and video industry’s drive for monetization, which so often includes advertising, square with the need to make video operations more sustainable? What responsibility do TV and video service providers have to reduce emissions from advertising that they show and how can positive change be achieved? Before answering these questions, we first need to better understand the relationship between advertising and emissions.
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As pay-TV operators and service providers look to boost their monetization, targeted TV advertising is gaining significant traction. Even Netflix has surrendered to the trend, joining the rest of the other streaming giants in the AVOD world by launching its own advertising tier.
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With recessions taking their toll and subscription income flatlining, scouting out new monetisation options to boost balance sheets has never been more critical for the media and entertainment industry.
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Red Hat began by providing software to run on Linux about 30 years ago. As the largest open-source company in the world, we believe using an open source development model helps create more stable, secure, and innovative technologies. Our portfolio is broader, including hybrid cloud infrastructure, middleware, agile integration, cloud-native development, and management and automation solutions for service providers.
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Jeff Bezos once compared Amazon’s approach to customer experience to hosting a party 24/7. “We see our customers as invited guests to a party, and we are the hosts. It’s our job, every day, to make every important aspect of the customer experience a little bit better.” Bezos’ comments came way back in 2004. But they could just as easily be describing the challenges facing broadcast media today as brands look for growth in the OTT market.
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Some sports are undoubtedly global leaders, with an audience to match. Then there are others, which enjoy immense popularity in certain markets but are less well known elsewhere. Ice Hockey, for instance, is a national obsession in Canada but is still relatively niche in the UK. Rugby has an estimated global following of 475 million people, but its popularity tends to be concentrated in specific regions. When it comes to building up a dedicated audience in new markets, there are several challenges that need to be overcome.
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The two basic premises of broadcasting haven’t changed for the last 100 years or so. One, give viewers compelling programming and they’ll watch. Two, effective monetisation is critical for supporting all that programming.
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Despite the continuing growth in audiences for streaming content, the established broadcasters remain popular. Indeed, market predictions are that, while streaming services will gain viewers and revenue, traditional linear television will remain stable; Statista even suggests a slight rise in daily viewing hours.
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