Streaming Industry Trends in Q3: What Advertisers Should Expect Entering Q4

In the third quarter of 2023, leading platforms in the streaming industry continued to fight for market share and active user time in an ever-more crowded field of competitors. At the same time, ad-supported streaming and ad inventory quality became more urgent priorities for both the streaming giants and smaller upstarts looking to build their brand.

As options for advertising on streaming services continue to expand, local businesses should be paying attention to these evolving streaming trends and their impact on both cable and streaming ads. Here are some of the top Q3 trends that will continue to shape the streaming landscape in the final months of 2023.

Streaming + Cable is Beating Out Broadcast

According to a new report from Nielsen, both streaming and cable TV are beating out broadcast in terms of the amount of time U.S. consumers spend watching each service. Combined together, streaming and cable account for more than 68 percent of all TV viewing time, underscoring the value of investing in both cable and streaming TV advertising.

On its own, cable draws nearly 50 percent more active viewing time than broadcast TV. By allocating TV ad spend to inventories and media partners that deliver ads to both cable and streaming audiences, businesses can potentially deliver ads to more than two-thirds of their local market.

YouTube and Netflix are Vying for the Market Lead

Is YouTube or Netflix leading the streaming market? It depends on how you measure their performance. In terms of overall share, YouTube is beating Netflix by a slim margin of 8.8 percent to 8.2 percent—and both are well ahead of the next streaming platform, which is Hulu at only 3.5 percent.

When measuring daily time spent on the platform, though, Netflix has YouTube beat by an average of 11 minutes. This superior active user time might be an important distinction for businesses looking to advertise on Netflix and take advantage of its expanded ad-supported subscription tier.

Cable Subscribers Rank Among the Most Engaged Streaming Audiences

The expansion of ad-supported streaming programming is bringing the streaming video experience more in line with the experience of watching linear cable programming. But cable maintains a very interesting advantage when planning TV media buys: compared to streamers, cable subscribers have shown themselves to be the most engaged user base.

That’s one of the main takeaways of Comscore’s “2023 State of Streaming” report. Even when targeting consumers through streaming TV advertising, cable subscribers may offer the best value in terms of their engagement with digital video content.

“Cable/satellite subscribers remain some of the most engaged users in the streaming landscape,” said James Muldrow, Vice President, Product Management at Comscore, in a press release. “With three cable/satellite providers in the Top 10 ranking of video services based on hours watched per household, these findings highlight the success of these providers in offering advertisers consistently engaged streaming audiences.”

Both Streamers and Consumers are Embracing Ad-Supported Content

On the heels of early success in attracting users to ad-supported subscription tiers, availability for these ad-supported options is expanding—and streamers are starting to encourage premium subscribers to jump over to those cheaper subscription options.

The big reason? Ad-supported subscriptions are delivering better margins for streamers, so users offer more long-term value on an ad-supported subscription than when paying more up-front for the premium, ad-free service. This recent push could lead to a dramatic increase in ad-supported subscribers, which will trigger a subsequent increase in streaming ad inventories. Expanded choice could be a boon for local advertisers, leading to more cost-effective media buys.

Want help with how to advertise on streaming services? Looking for a partner who can explain how the latest streaming TV trends might impact your ad strategy? Cox Media can help your business adapt its digital ad strategy to a fast-changing landscape. Contact us today to learn more.