According to Mark Boidman, partner and global head of media at Solomon Partners, in an interview with Yahoo Finance, The streaming war underwent a transformation from a pure race for subscribers to a competition for advertising revenue, driven by a greater quest for profitability.
This shift means that battles in the streaming field are no longer limited to one platform versus another. Boidman described the competition in the streaming field as "a different kind of battle" as the platforms go up against broadcast television and its significant ad revenue.
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According to recent data from eMarketer, TV ad spending in the US reached the $66.64 billion mark in 2022, an increase of over $5 billion from the previous year.
Despite expectations of a drop in spending on ads over the next five years, the expert argues that value creation for shareholders by capturing advertising revenue from free-to-air television is an opportunity that all these companies are seeking. to enjoy.
In his predictions, Boidman highlighted that the cable is heading towards obsolescence in the next 10 years, which represents a significant opportunity for streaming companies not just to reach new audiences, but also to capture a piece of investment in advertising.
It could also mean the end of traditional television and the preference for streaming platforms.
Disney (DIS) has announced plans to streamline its pricing model to increase subscription revenue. ad-free premium, while driving the growth of subscribers who opt for the lower cost option with adverts.
In December of last year, the company launched an ad-supported subscription option priced at $7.99.
Additionally, Disney has announced its plans to soon offer a single app experience in the domestic market. which will combine Hulu content with Disney+, following a similar approach to Showtime's integration by Paramount.
That strategy will also include the integration of HBO Max and Discovery+ into its offering.
During Netflix's virtual kickoff earlier this month, the platform revealed that its ad-based subscription plan, called "Basic with Ads," counts with 5 million monthly active users worldwide, a metric considered important for advertisers, according to Jeremi Gorman, President of Worldwide Advertising at Netflix. The plan was launched in November.
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