July 22, 2021  |  Ideabar News

What the steady rise of OTT advertising means for brands

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Since 2010, the pay TV penetration rate in the U.S. has dropped from 88% to 74%, and according to the latest data, more than 46M U.S. households will cut their pay TV cord by 2024.

In 2020, U.S. TV providers suffered a record loss of more than 5M subscribers. Consumers are cutting the cord primarily for three reasons:

  • 71% say because they can access the content online
  • 69% cited pricing of cable/satellite services as too high
  • 45% say they do not often watch TV


The beneficiaries of this shift have been the OTT providers, who experienced record growth over the past year and a half. Given that success, many traditional linear service providers have entered the space – Disney+, HBO Max, Peacock, Paramount Plus and many more.

What is OTT? OTT (over-the-top) is advertising delivered directly to viewers over the internet through streaming video services, devices (Roku, Apple TV, Amazon Fire TV), smart TVs, gaming consoles or connected TVs (CTV).

The Big 5 accounted for 82.5% of OTT streaming hours in March 2020:

  • Netflix
  • YouTube
  • Hulu
  • Disney+
  • Amazon


This trend was led by younger viewers, adults 18-34. However, over the past year, the pandemic fueled rapid growth of OTT market across demographics. The way we view content has dramatically shifted.   Consumers want to watch what they want, when they want it on the device of their choosing at a low price. Now about one-fifth of all TV viewing comes now from streaming, according to Nielsen.

In 2021, $119.69B will be spent on U.S. video subscriptions, including revenues for pay TV and OTT providers:

  • YouTube TV and Hulu + Live TV have added the most subscribers, and this year these two platforms will receive 75% of all US MVPD (a service provider that delivers TV programming over cable, satellite, wireline or wireless networks) subscription revenues.
  • How does this impact Netflix? About 60% of U.S. households currently use Netflix:
    • Netflix’s revenues are rising. However, their share of total OTT revenue is declining as more companies enter this space
    • Netflix will account for 30.8% of all U.S. OTT subscription revenues in 2021, down from 36.2% in 2020.


Brands need to constantly evolve their video strategy and consider how OTT fits into their holistic media strategy to tap into this growing audience. OTT allows for layers of targeting not available on traditional linear TV and can act as a full-performance channel, nurturing consumers from awareness through the entire funnel.

The landscape has grown and changed dramatically over the past decade. We can help your team navigate it and provide the best strategy to achieve your goals.



TVVision CTV Advertising Report 2021
TTD Future of TV Report June 2021
eMarketer US Time Spent with Media 2021 Update
eMarketer US Subscription Video Revenues 2021
Pew Research Center | Cable and satellite TV use had dropped dramatically in the U.S. since 2015






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