Top Streaming Trends from Q1, And What to Expect in Q2

In the first few months of 2023, we’ve seen some of the bigger streaming platforms prioritize user retention and profitability, while some of the fast-rising services have worked to rapidly add users and scale their platforms and revenue.

From ad-supported content to streaming habits across devices, these trends carry important implications not only for streaming platforms, but for small businesses eager to advertise across this sprawling digital inventory.

To help local business leaders track this changing landscape and the opportunities it offers, we’re highlighting some of the top trends from Q1 that are likely to affect digital local video marketing strategies in Q2 and beyond. Here’s our review of the current state of streaming, and what it means for your digital video campaigns.

But first – we know there is a seemingly endless list of terms and acronyms that go hand-in-hand with understanding the streaming television space. Access our free, comprehensive glossary here.

Ad-Supported Streaming Has Surged in Popularity

From inflation to lingering economic uncertainty to rising streaming prices, there are many reasons why consumers are more interested in testing out ad-supported streaming options. Netflix provided a major test-case for this ad-supported model when it announced its more affordable streaming subscription last year.

The early results of this test-case are promising: Netflix reportedly surpassed more than 1 million ad-supported subscriptions in the first two months since its launch. Although adoption is in the early stages, the company achieved 500 percent month-over-month growth in its ad-supported user base.

The more consumers embrace ad-supported options, the more abundant and cost-effective streaming ads will become to local businesses. Expanding ad inventories will make it easier to reach a niche streaming audience and diversify your digital advertising strategy.

This is particularly true about FAST (Free Ad Supported TV) services. The no-cost factor is especially appealing to consumers, and the evolution of the content that FAST services offer has come a long way in terms of featuring more current shows than they had in the past, plus movies and live TV channels. In fact, the biggest FAST Channel, Pluto TV, recently reported its highest monthly global users at 72 million, about 20 million more than in the corresponding quarter a year earlier. This is likely due to PlutoTV evolving to offer content from nationally recognized brands like CBS News, Comedy Central, MLS, MTV, Fox Sports, The History Channel, Hallmark movies, and more.

Consumers of All Ages Are Now Streaming Across Multiple Devices

Younger generations have historically been more agile in streaming video across multiple devices, including their smartphones, tablets and connected TVs. But recent trends suggest that this multi-screen video trend is being embraced by older audiences, too, diversifying the ways local businesses can connect with consumers from any demographic.

These evolving habits give your advertisements more options when targeting an audience: mobile device location, device screen size, and other filters can be employed to focus ad deliveries on streaming users that represent the most value to your business.

Subscription Fatigue is Hitting Consumers Hard

The ever-expanding number of premium subscription services are struggling to grow their user base as quickly as some of the bigger streaming giants. But subscription fatigue is hitting even the most formidable streaming brands: Netflix’s ad-supported subscription service was designed largely as a solution to net subscriber losses experienced in 2022.

With a saturated streaming market and the rising monthly costs they bring, consumers are showing signs of frustration. According to a 2022 survey, 72 percent of U.S. consumers believe there are “too many” paid subscription services. Seventy-eight percent of consumers dream of having a single app or digital destination where they can access and manage all of these subscriptions.

Along with an increased risk of subscription cancellations, this fatigue is driving increased demand for ad-supported content options. It’s also possible that some consumers will demonstrate renewed appreciation for cable TV services that offer cable TV, video on demand and OTT content all in one place.

Taken all together, the impact of subscription fatigue could further increase streaming ad inventory options, and possibly shift more audience attention away from premium subscription content and toward cable TV and other ad-supported video.

The Cable TV Experience is Shaping What Viewers Want From Streaming Video

Rather than replacing cable altogether, streaming video now coexists with traditional television in many U.S. homes, diversifying each consumer’s content viewing options.

But the relationship between cable and streaming isn’t only about their competition for consumer attention. As streaming services evolve and seek the sustained loyalty of their user bases, they’re increasingly looking to cable TV for inspiration in building a better streaming experience.

A growing number of streaming services, for example—including Hulu, Sling and YouTube—have launched live-TV streaming services, including a select number of TV channels, to offer the live viewing experience many consumers seek for news, live event broadcasts, and especially live sports.

Meanwhile, more streaming services are packaging themselves together into cost-effective “bundles” bearing striking similarity to the bundled channel packages offered by cable TV. And, as mentioned above, the introduction of ad-supported content helps make this content more affordable, not unlike the cable TV business model.

Finally, viewers are still watching on the largest screen in the house. While yes, there is a mobility angle to streaming with smaller devices, the reality is that viewers are still tuning in to their traditional television set. As you explore advertising across platforms, it’s important to focus on the audience versus the platform itself.

The Importance of Streaming to a Holistic Digital Video Strategy

While digital video streaming continues to look more and more like cable TV, the distinct advertising opportunities enabled by streaming make it a valuable asset to any digital marketing and advertising strategy. Today’s video audiences are more fragmented than ever—and brands that embrace a holistic approach to advertising will be well-positioned to connect with consumers and strengthen brand loyalties.

As your business tries to strike the right balance between linear TV vs. streaming advertising, a small business marketing consultant can help you develop a multi-channel strategy that reaches a relevant audience and maximizes engagement.

With powerful targeting tools and a vast inventory of both cable TV and streaming inventories, Cox Media can help you plan and launch a successful digital video strategy. Ready to get started? Contact us today.