A Short History And Projected Future of Connected TV

HOW CTV STARTED

One of the first places CTV started was with TiVo. In 1999, they made it possible to digitally record TV shows and watch them in your own time. While this was a short step away from recording a show on a VHS tape, TiVo was the first to go digital. They created the groundwork for modern streaming services.

In 2005, two major leaps in CTV technology happened. iTunes made it possible for users to download and watch shows from their devices, and YouTube launched online, allowing people to become content creators. 

YouTube kickstarted the growth of watching videos online through one searchable platform. It made a system of likes and dislikes famous and curated content for users based on their previous views while empowering the consumer to become a creator. 

THE GROWTH OF CTV

One of the biggest moments in CTV history started in 2007 when Netflix introduced its streaming service. Netflix’s streaming platform exploded in popularity. Only four years after launching its streaming service, Netflix reported over 21 million subscribers. 

With its rapid growth and popularity, Netflix led the way and showed that a streaming network could do more than just share content—they could create it as well. In 2013, they started doing just that with their first original content series, House of Cards, and have since produced original content in 15 languages and won 225 Emmy nominations and 51 awards. 

Netflix’s popularity and growth spurred other streaming services to enter the market. These services include Hulu, Amazon Prime Video, Crackle, Acorn, Apple TV, HBO Max, CBS All Access, Disney+, and Peacock. 

Seventy-eight percent of all U.S. households now have a subscription to at least one streaming service, and 55 percent have a subscription to more than one of the big three streaming services (Netflix, Hulu, Amazon Prime). This spike in CTV illustrates people primarily consume media on streaming services, with numbers that overwhelm traditional TV and cable shows. 

In 2019, the final season of Game of Thrones on HBO had 17.4 million viewers, whereas Netflix was able to get 26.4 million for Stranger Things in its first four days. More recently, The Queen’s Gambit had a viewership of 62 million households, breaking all records set by Netflix’s original series. If these shows were broadcast on TV, they would rank second in viewership of the top TV programs in 2020, only outclassed by the Super Bowl.

THE FUTURE OF CTV

While there is no exact way to know what will happen in the future of connected TV, there are trends we’re starting to see. Here’s what you can keep an out for with the rapid growth of CTV. 

INTERACTIVE ADS

Traditional video ads interrupt and delay the video you’re watching. Some services offer you the chance to remove these ads with a premium subscription, but chances are these boring 30-second commercials are going to slowly disappear. 

Rather than an ad being something you sit through, connected TV advertising allows the user to interact directly with the ad experience. Because we watch CTV on our phones, laptops, computers, and devices, advertisements are going to become something we can click, drag, and play with to create a more engaging and entertaining experience. 

DATA GATHERING

Personal user data is powerful, and how companies use or protect it is drastically changing how users interact with them. What you watch, when you watch, and how often you watch CTV can be tracked and used to create a user profile.

You can already see some of this user information being used in existing platforms. Some services provide you with a list of recommended movies or shows similar to what you have already watched or liked. This can go even further, depending on the privacy policies of companies, to influence the advertisements you receive. 

Customer data can also be used to track genres or styles that are preferred at large, which is then used to create new media to meet those preferences. For example, if everyone started to love shows and movies about gardening, there’s a better chance for more shows and movies about gardening to be produced. 

INCREASED COSTS

The original two forces of CTV, Netflix and Hulu, were groundbreaking in showing this model could work. They’ve done such a great job that there’s a growing number of platforms and services trying to take segments of that market. This will lead to an oversaturation of options, which will increase costs and can even lead to platforms failing. 

One of the biggest strengths of Netflix and Hulu was their wide range of shows and movies. With the roll-out of services like Disney+, CBS All Access, and Peacock, each company is taking back its IP and only offering it from their platform. This oversaturation of the market makes it impossible for one platform to have a wide depth of shows. It also forces viewers to pick the platform they want rather than getting it all in one location. 

Because consumers have to choose which service they are going to subscribe to, the subscription numbers are going to become broadly distributed over multiple subscription services, rather than in one location. Companies are going to face fewer memberships and subscriptions while still trying to keep the same business model. The solution will most likely be to increase costs because the other option of limiting services to save costs is not as viable if they are looking to retain customers. 

START ADVERTISING ON CTV

Your company can start advertising on Connected TV platforms today. Agility can show you how your ads could be seen alongside award-winning shows and movies across all devices. Find out why you should move your advertising budget to Connected TV.