Insights

“As TV converges with digital, and OTT impacts the economics of the market and audience consumption behavior, we expect M&A to continue to drive change across content, distribution and monetization.”

Joshua Wepman, Managing Director

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Sector Snapshot: Changing TV Landscape

As viewers turn to a variety of platforms and devices to watch TV, advertisers are turning to personalized advertising—”addressable TV”—to increase the impact and relevance of their advertising. Total US addressable TV ad spend reached over $2 billion in 2018 and is projected to grow year over year by 28% over the next two years. Though the market is relatively nascent compared to traditional TV advertising, it has the potential for explosive growth as it bridges the gap between digital and linear.

DEFINING ELEMENTS OF THE TV ADVERTISING MARKET

  • OTT and Fragmentation Driving Viewership
    Overall US video consumption is growing as content becomes specialized and consumers embrace over-the-top (OTT) IP-delivered media
  • Rise of Direct-to-Consumer
    The rapid rise of direct-to-consumer media offerings is changing the role cable companies and multiplatform video programming distributors (MVPDs) play in the delivery of TV content
  • Convergence of TV and Digital
    TV and digital increasingly resemble one another as both embrace technology to deliver content and targeted, personalized advertising

DATA’S ROLE IN CREATING OPPORTUNITIES FOR THE TV MARKET

In monetization, big media companies will use data to improve targeting in addressable and connected TV, as well as to drive CPMs.

When it comes to advertising, TV and digital ad spend are increasingly converging. Furthermore, like digital, TV continues to turn programmatic, leveraging the efficiencies offered by the automated, data-driven approach to buying and delivering ads.

NOTABLE 2019 M&A ACTIVITY

  • Disney’s acquisition of Hulu for $19.3 billion (announced May 14, 2019)
  • Altice’s acquisition of Cheddar for $200 million (announced April 30, 2019)
  • Viacom’s acquisition of Pluto TV for $340 million (announced January 22, 2019)
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