It ain’t easy being a broadcaster these days.
TV budgets are often the first to get cut during economic downturns, the streaming wars are raging, and the axe of supply-path optimization is hovering.
I saw the pressure come to a boiling point last month when I tuned in to more tech and data showcases and year-end earnings calls than I care to count. Aside from all the peacocking (pun intended), February was a month of major belt-tightening.
Streaming or dreaming?
Just about every broadcaster has an ad-supported streaming service now, which is why upfront planning is starting early this year.
In February, Disney touted forthcoming targeting and measurement improvements for Disney+, including direct integrations with more identity providers. And NBCUniversal strutted its shoppable video stuff with new ad formats for Peacock and new licensing deals for NBCU Checkout.
Other broadcasters are banking on consolidation.
Paramount has been plugging a new streaming bundle with Showtime to woo advertisers with more scale, and Warner Bros. Discovery (WBD) promised it’s making headway on merging Discovery+ and HBO Max.
But what’s going on behind closed doors?
Big, bad budget cuts
Layoffs are ubiquitous in the TV world right now.
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This year alone, Disney dropped at least 3% of its global workforce, NBCU cut staff from its news networks and ad sales teams, and Paramount’s plan to fold Showtime into its streaming service eliminated roughly 120 jobs.
WBD claims the worst impacts of its restructuring are behind it now, but the hunt for profitability continues.
Despite flat subscriber growth compared with the competition, WBD made headlines last week for plans to favor franchises over originals so it can spend even less on content. (Sorry, HBO Max.)
2023 is also apparently the year of price hikes. Paramount just raised the price of its ad-free and ad-supported plans, and HBO Max recently got its first-ever price increase. Oh, and Disney+ without ads now costs $3 more per month, too.
Charging more to help these services achieve profitability won’t help stem subscriber churn – but what other choice do broadcasters have?
Well, they can lower subscription prices, as Netflix did recently in certain markets. Netflix is desperate to lure back subscribers that jumped ship after the streamer started enforcing against password sharing.
But streaming services aren’t the only ones dealing with tough times.
Tech it or leave it
The economic slump is landing blows on TV ad tech companies, too.
Supply-side platforms have the added pressure of proving unique value as buyers call for supply-path optimization.
Magnite, for example, says that the integration between its SSP and its ad server helps streamline TV ad buys better than the competition, and it’s not alone in making this claim. Two other SSPs pitched the same value proposition to me over the past month alone.
And the macroenvironment continues to bear down.
Magnite is laying off 6% of its staff, and it isn’t alone. CTV ad server Innovid is cutting its global workforce by 10% this year.
The competition is clearly heating up for companies in the connected TV space. What I’m wondering is: Will economic pressure quicken the creation of winners and losers?
Let me know what you think. Hit me up at alyssa@adexchanger.com.
