Streaming TV Viewing Time Continues Its Rise Over Cable

This July, streaming TV viewership passed cable for the first time. But are advertisers keeping up with this rise?

The State of TV Viewership

Streaming has been growing in popularity among consumers over the last few years, and this year we have finally seen the tipping point for this channel surpassing linear TV in terms of viewing time.

This July, streaming viewership passed cable for the first time ever. According to a report from Nielsen, streaming made up 34.8% of all viewing time that month, topping cable’s 34.4% and broadcast’s 21.6%. And that rise in streaming viewership only continued through the rest of the year—reaching 36.2% of all viewing time in September vs. the 33.8% and 24.2% of time that consumers spent with cable and broadcast, respectively. This is despite a 222% increase in sports viewing on broadcast channels around that time.

Part of the reason for this drop in viewership on linear has been the rise of cord-cutting. This year, the number of pay TV households dropped significantly—falling 7.2% to 66.4 million households. At this rate, eMarketer expects non-pay TV (cord-cutter and cord-never) households to outnumber pay-TV households by next year, and reach 25 million more households than pay-TV by 2026.

It comes as no surprise that so many households have chosen to make that switch from linear to streaming this year. One study from Civic Science found that 63% of cord-cutters did so because they considered cable to be too expensive. With the recent economic turmoil, many households can’t justify spending an average of $1,618 a year for cable TV channels they don’t watch.

And What About Advertisers?

Advertisers have also been increasing their investment in Connected TV ads. eMarketer estimates that US CTV ad spend will exceed $21 billion this year—reaching $43.59 billion by 2026. The source actually raised their estimates in October due to the number of streaming services that added ad-supported tiers this year, and the news that mid-tier streaming services had more ad growth than expected.

However, advertising on CTV overall has yet to catch up with this channel’s increase in viewership. By the end of 2024, CTV ad spend will reach 50% the size of linear TV ad spend. This is somewhat to be expected—eMarketer points out linear TV has been an integral part of many marketing campaigns over the last six decades, so the rise in CTV ad spend we have seen is already impressive. After all, in 2019 CTV ad spend was only one-tenth the size of linear.

Conclusion

As American viewers continue to increase the time they spend watching Connected TV over channels like linear and broadcast, we can expect advertisers to make some changes to the way they approach advertising on these channels. However, with how entrenched linear has been in the world of advertising in the past, that growth is expected to be slower than the rate at which consumers make the switch. Continued cord-cutting and the addition of new ad-supported streaming tiers and services will help advertisers see the value in shifting their ad dollars to reach consumers on Connected TV.