New Survey Shows 27 Percent of U.S. Households Plan to Cut Cable TV Subscriptions in 2021
January 12 2021 - 9:00AM
Business Wire
Advertisers View Connected TV as #1 Alternative
to Linear TV; Rethink Upfronts
American households are cutting the cord on their cable
subscriptions more rapidly than previously reported, according to
the second Future of TV survey of more than 2,100 U.S. consumers by
The Trade Desk (Nasdaq: TTD). The data shows 27 percent of U.S.
cable TV subscribers are planning to cut their subscriptions by the
end of 2021. That percentage is nearly double the 15 percent of
cable subscribers who reported cutting the cord in 2020, and
significantly higher than the approximate 3 percent annual decline
reported by eMarketer prior to 2020.
The COVID-19 pandemic has accelerated consumer behaviors and
trends that are defining a new era of TV consumption. With more
U.S. consumers working at home, many under increased budget
pressure, and with the broader availability of streaming services,
streaming consumption now accounts for 68 percent of TV viewing
versus 28 percent for traditional TV viewing.
Even live sports can’t keep viewers tethered to traditional TV
as more U.S. households turn from cable to streaming platforms to
watch their favorite teams. After a pause in live sports caused by
the pandemic, almost 39 percent of sports viewers are now watching
live sports events via connected TV (CTV) such as ad-supported
streaming and social media platforms, according to the survey. Only
30 percent of U.S. consumers cite live sports as a reason for
maintaining a cable TV subscription – significantly down from the
60 percent that cited live programming, including sports, just nine
months previously.
“COVID has accelerated cord-cutting trends that were already
underway, to a point where less than 50 percent of U.S. households
today have a cable subscription. It’s not because U.S. consumers
have fallen out of love with TV, but that there are now more
convenient ways of consuming it. That even applies to traditional
cable mainstays, such as live sports,” said Tim Sims, Chief Revenue
Officer, The Trade Desk. “As more broadcasters launch and expand
their streaming services, these gaps are only going to widen.”
As Americans shift to CTV, there’s a limit to their tolerance
for subscription services. Fifty-one percent of U.S. consumers are
unwilling to spend more than $20 in total per month on streaming
subscriptions, according to the survey. Furthermore, U.S. TV
viewers are more than five times more likely to prefer free or
low-cost streaming TV with ads, over streaming services with higher
monthly subscription fees with no ads (72 percent versus 14
percent).
Advertisers Follow the Audiences; Rethinking Upfronts and CTV
Skills Development
As traditional TV consumption declines and CTV viewership
continues to rise, marketers are embracing the CTV opportunity. A
separate survey of 150 advertisers conducted with Advertiser
Perceptions found that, among marketers who had revised their TV
plans as a result of the pandemic, CTV ranks as the #1 channel
choice as marketers reallocate campaign budgets. Furthermore,
marketers state that CTV now represents 18 percent of their
advertising spend moving forward, a significant acceleration from a
standing start in recent years.
But this shift means that marketers must rethink their
longstanding ad-buying habits, as well as the necessary skills
investments in their teams, to capture shifting audiences. For
example, the majority (59 percent) of linear TV buyers said they
are making fewer upfront commitments in 2021, with ad dollars
moving from traditional TV programming to CTV.
In addition, marketers are rethinking how they can better equip
themselves with the skills and capabilities to develop the right
teams to keep pace with the accelerated shift to CTV. According to
the advertiser research, ad buyers will focus on CTV marketing
skills in 2021, as 37 percent said they intend to hire new talent
fluent in CTV. And more than half (55 percent) said they plan to
take steps to ensure their current TV ad buying teams can navigate
both linear and CTV channels.
Every aspect of the decision-making process of TV advertising,
including measurement, frequency and creative, will have to evolve
as more consumers shift to CTV. And marketers are recognizing just
how critically important CTV is to their advertising strategies if
they want to win the hearts and minds of consumers. According to
the survey, the top focus areas for CTV ad buyers are:
- The shift from a content-first to an audience-first approach –
Prime-time is now anytime, as marketers are no longer tied to a
schedule.
- More focus on integrated, cross-channel strategies – To improve
the viewer experience, manage frequency and better target specific
audiences.
- Focus on non-traditional ad formats – Especially shorter
ads.
“The TV ad business is at a tipping point. Advertisers can reach
more households via CTV than via traditional linear TV for the
first time. That trend is not reversing,” said Sims. “Digitally
savvy advertisers recognize the advantages of CTV advertising,
including precision measurement, an audience versus content focus,
and the ability to apply data to all aspects of their TV campaigns.
Many are embracing these opportunities, and that also means
transforming some of the industry norms, including how we think
about skills and ad-buying processes such as the upfronts.”
Methodology for YouGov survey The second annual Future of TV
consumer survey was conducted for The Trade Desk by YouGov.
Fieldwork for this survey was conducted on December 4-8, 2020. It’s
a representative survey with a total sample size of 2,105 adults in
the U.S. The survey was carried out online. The figures have been
weighted and are representative of all U.S. adults (aged 18+).
Methodology for Advertiser Perceptions survey Advertiser
Perceptions conducted an online survey of 150 TV advertising
planning and buying decisionmakers with an annual TV ad budget of
$5+ million. Fieldwork for this survey was conducted on November
18-30, 2020.
About The Trade Desk The Trade Desk™ is a technology
company that empowers buyers of advertising. Through its
self-service, cloud-based platform, ad buyers can create, manage,
and optimize digital advertising campaigns across ad formats and
devices. Integrations with major data, inventory, and publisher
partners ensure maximum reach and decisioning capabilities, and
enterprise APIs enable custom development on top of the platform.
Headquartered in Ventura, CA, The Trade Desk has offices across
North America, Europe, and Asia Pacific. To learn more, visit
thetradedesk.com or follow us on Facebook, Twitter, LinkedIn and
YouTube.
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version on businesswire.com: https://www.businesswire.com/news/home/20210112005291/en/
Melinda Zurich melinda.zurich@thetradedesk.com 201-320-9398
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