After spending years amassing streaming subscribers at great cost, media companies now need to make some profits. And they’re increasingly leaning on advertising as the answer.
Look no further for proof of that than the most recent annual Upfronts, the events where media companies like Fox Corp., Warner Bros. Discovery, Disney and Comcast’s NBCUniversal, made their pitches to advertisers.
With the absence of stars and talent due to the ongoing Hollywood writers’ strike, NBCUniversal kicked off its event with an animated video of Ted, the foul-mouthed teddy bear created by Seth MacFarlane who has landed a series on the company’s Peacock streaming service, singing and dancing to a tune that included the refrain “We need ads.”
“We were all dreamers to think that the streamers were anything but fads,” the animated teddy bear sang to the audience. “Now, we’re all begging for ads.”
The ad push comes not only as subscriber growth slows and customers drop in and out of services — commonly known as churn in the media business — but as the advertising market has softened and been slow to recover.
During Disney’s earnings call earlier this month, CEO Bob Iger put new emphasis on ad-supported streaming. And Paramount Global and NBCUniversal have touted that they’ve had cheaper ad tiers since the get-go. Warner Bros. Discovery also has added such options for consumers.
“Despite the near-term macro headwinds of the overall marketplace today, the advertising potential of this combined platform is incredibly exciting,” Iger said after announcing Hulu content would join Disney+, a move that would be a positive for advertisers.
Even Netflix, which was against advertising for years, entered the game. The 800-pound gorilla in the streaming room for the first time this past week held a virtual presentation for advertisers, unveiling information about its ad-supported tier that gave a boost to its stock.
Still, it’s early in the game, and it’s unclear whether advertising will fill the gaps of unstable subscriber growth for streaming.
https://www.cnbc.com/media/
