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About half of the U.S. population uses a connected TV, according to Nielsen. As of the third quarter of 2020, that was about 123 million connected viewers — up 24 million from a year earlier.
Variety hosted a panel of media executives to explore this era of connected TV, in a discussion moderated by digital editor Todd Spangler. Joining the conversation were Kevin McGurn, Vevo’s president of sales and distribution; Amy Kuessner, ViacomCBS’ senior VP of content strategy and global partnerships; Rebecca Heap, Comcast’s senior VP of video and entertainment; Sang Kim, Samsung Electronics’ senior VP of product and marketing; and Ashley Hovey, Roku’s director of AVOD growth.
Vevo has seen ad revenue skyrocket on connected TV platforms, according to McGurn: In Q1 of 2020, the music streaming service’s connected television revenue was 4% of its total business — jumping to 40% in Q1 of 2021, and is on track to be 50% by the second quarter. “And that is on a very big number, so this is not just a law of big percentage growth, this is actually really meaningful revenue,” making Vevo comparable to a mid-to-upper-tier cable network, he said.
From Roku’s perspective, “2020 was really just the start of the streaming decade,” Hovey said. “We reached 50 million active accounts, again, driven by the pandemic, people being home. It’s really a secular shift… Our ad-supported viewing is driving a huge amount of that shift.”
Heap said consumer acceptance of over-the-top services — like Xfinity Flex for Comcast’s broadband-only customers — is growing and has accelerated over the last 12 months. “I absolutely believe that it’s here to stay,” she said. “These are new habits that have been formed through a fascinating year, but they’re long-term habits.”
When it comes to searching for what to watch, Kim explained that 60% of Samsung’s audience turns on the TV knowing exactly what they want to watch, while the remaining 40% spends an average of 20 minutes searching.
“On our platform, what we see is you have a limited time and you have limited real estate space to promote your content,” he said. “We provide a discovery service for those 60%, as well as that 40%, so when they come in, they can find what they’re looking for and send them to their content as quickly as possible.”
And though everyone loves to watch an episode of their favorite show uninterrupted by commercials, to choose an ad-supported service over a subscription service lets viewers pick from a more diverse content catalog.
“Advertisers can’t reach someone on a subscription service the way that they can reach someone in an ad-supported service,” Roku’s Hovey said. “This ecosystem continues to fuel users having choice and having value, because specifically for the Roku channel, we can bring in all of this ad supported content that isn’t just the big named shows that are on the larger services.”
ViacomCBS’ Kuessner predicted growing price-point segmentation among services in the connected TV space. ViacomCBS Streaming offers the free, ad-supported Pluto TV and just launched Paramount Plus, a rebranded and expanded version of CBS All Access. “We’re very well poised to move that user through the ecosystem, and create various windowing strategies to support the content and make it complementary between the services,” she said.
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