Hugh Scallon’s Post

🖥️✅ DIGIDAY (2-24): “At first, no one knew if this repricing of streaming ads would stick. Maybe CPM prices would creep back up once Amazon settled in. They did — just not anywhere close to the heights streamers once enjoyed. Call it the Amazon effect. Like Disney, it made its main Prime Video subscription tier ad-supported. In doing so it shifted the foundation of its streaming business to advertising, unlocking more revenue per viewer, especially with a massive built-in audience of 115MM monthly U.S. viewers at the time. But unlike Disney, Amazon played a different game on price. Instead of going high, it flooded the market with cheaper inventory (50B ad 000s, according to MoffettNathanson). Advertisers jumped at the bargain, but not enough to soak up the sheer volume of impressions now available. More supply than demand never keeps prices high. Netflix has taken the biggest hit. eMarketer’s analysis (see chart below) makes that abundantly clear. Since the first quarter of 2024 (i.e. when Prime Video introduced ads), Netflix CPMs have fallen more than those of Prime Video, Disney+, Max, Peacock and Hulu. They dropped from $42.14 to $31.05 by the end of the year. In comparison, Prime Video CPMs slid from $35.25 to $28.01. While streaming ad inventory is abundant, spending on these platforms, and the broader CTV market, is still growing. Even so, another dip isn’t out of the question, though it likely won’t be as steep as in 2024. Too many forces are still in play, from Amazon gaining more subscribers (and with them, more ad inventory) to its plan to introduce more ads during shows. More inventory always puts downward pressure on prices. “There isn’t going to be anything as major as Amazon flipping a switch on a lot of ad inventory when it comes to driving prices down but there are definitely going to be other factors at work,” said Ross Benes, a senior analyst at eMarketer. “Just consider the fact that the streamers are pushing more people into ad-supported plans by raising the prices of their ad-free ones. That’s going to create more ad inventory. Plus, more people are spending time streaming, not to mention the fact that there’s more live sports on these services now. All of that is going to increase supply, which will probably reduce CPMs a little.” ⬇️ #streamingtv #ctv #ott #fast #tvos #avod #svod https://lnkd.in/eVtUZnb4