As Netflix has done in the ad-free streaming space, Hulu has dominated the ad-supported streaming landscape for years. It continues to do so. But in 2021 it will get more competition from other streamers that will offer advertisers TV-quality programming and audiences unlikely to tune into traditional TV. In other words, the streaming war is finally starting on the ad-supported side of the market. “This is the year,” said one agency executive.

NBCUniversal’s Peacock is operating at close to full strength, having rolled out nationally last summer and closed a distribution deal with Roku in the fall, though it is not yet available on Amazon’s connected TV platform. Meanwhile, Discovery debuted its direct-to-consumer streaming service Discovery+ on Jan. 4, and ViacomCBS and WarnerMedia are slated to follow suit later this year with Paramount+ and HBO Max’s ad-supported tier, respectively.

However, while the ad-supported streaming war may be officially kicking off in 2021, it will be some time before the competition among ad-supported streamers really heats up. Advertiser demand for streaming ad inventory has increased so much over the past year that it will be a while before anyone selling streaming impressions begins to lose ground. Nonetheless, there’s only so much advertiser money and audience attention to go around so it will become harder for the various ad-supported streamers to significant gain ground. “The big question is how many services are people willing to sign up for,” said a second agency executive.

Hulu’s grip on the streaming ad market is unlikely to loosen anytime soon, though. For starters, Hulu has a nearly 13-year head start that has positioned it as the gateway for TV advertisers shifting to streaming. “They’ve always been the first step after coming out of linear TV,” said the second agency executive. More to the point, Hulu’s hold on the streaming ad market has reached a new level in the last year.

In 2020, the Disney-owned streamer grew its subscriber base from 30.4 million subscribers at the end of 2019 to 38.8 million subscribers as of Disney’s investor presentation on Dec. 10 last year. And despite the corresponding supply of additional ad impressions, Hulu sold out its ad inventory in the fourth quarter for the first time in three years, according to agency executives. In the intervening years, Hulu’s subscriber growth had loosened its longstanding supply-demand disparity, but last year’s surge in streaming viewership spurred streaming ad demand to increase and closed that gap once again.

“All of a sudden there was a realization [among advertisers] that you need to be in streaming, and Hulu was stop number one for heavy TV advertisers. If you weren’t there, you needed to be there,” said a third agency executive.

While Hulu is unlikely to be unseated anytime soon, the influx of TV networks’ ad-supported streamers will create more competition for the free, ad-supported streaming TV …read more

Source:: Digiday

Author: Aaron