SAN FRANCISCO—The slow but steady decline of traditional linear TV continued apace in the second half of 2023, according to Samba TV.
In its latest State of Viewership report, the researcher analyzed approximately 46 billion hours of linear and streaming in the last six months of 2023, providing some insight into how the Hollywood actors and writers strikes have impacted an industry in an increasing state of flux.
"Our industry was presented with unique opportunities and challenges in 2023, such as the rise of live streaming sports, the impact of the strikes, and the proliferation of new measurement to understand ad performance,” said Samba TV Co-founder and CEO Ashwin Navin. “The traditional TV advertising playbook no longer applies. As the audience shifts to streaming across live and scripted programming, smart advertisers optimize frequency, impact, and efficiency together in one comprehensive strategy.
According to Samba, year-over-year, linear TV reach experienced a slight decrease but remained steady compared to the first half of 2023. Although the drop in the first half of the year has been fairly common in recent years, linear viewing has usually increased in the second half (perhaps influenced by the NFL). However, this year it didn’t, with the average daily reach of linear TV in the second half of the year on par with the first half, and down 4% from the previous year.
Streaming hours viewed experienced increases during Q3 and Q4 of 2023, with 23% and 18% spikes respectively, compared to the previous year. This rise in viewership occurred despite a decrease in programming releases by services like Netflix, Samba TV said, adding that linear hours viewed decreased during both quarters, as the balance between time spent with connected and traditional TV closes in the coming years.
As subscription costs rise and the trend of “exclusives” increases, Samba’s report showed that “subscription cycling” and platform churn has only increased over the past year. More than two-thirds of Gen Z and millennial consumers plan to cycle in the next six months. Nearly half (46%) of U.S. households watched two or fewer services throughout the second half of 2023, Samba said.
As streaming platforms made a big push via ad campaigns to convert linear and OTT viewers to subscribers in the second half of 2024, with Paramount+ and Warner Bros. Discovery's Max ranked as the top streaming platforms to serve up ad impressions for their platforms in the second half of 2024. Paramount+ ads dominated with a quarter of the share of voice, particularly during CBS primetime airings. Meanwhile, Netflix experienced the most significant year-over-year growth, serving more than double the number of impressions in the second half of 2023 compared to 2022.
Original programming is not necessarily the best way to gain loyalty, according to Samba which said its research shows that many top platforms see over half of their viewers watching only one of the top 50 programs. The exception to that rule is Netflix, with almost 70% of viewers engaging with multiple top shows.
In terms of the types of content that have the biggest impact, adaptations, docuseries, and blockbuster movies on streaming platforms are successful, while live sports remain dominant on linear TV, Samba TV said. Eighty-nine of the top 100 most watched linear programs of the second half of 2023 were sports, and NFL games accounted for 76% of those programs, led by "Monday Night Football" on ABC and "Sunday Night Football" on NBC. "60 Minutes" was the top non-sports program, with episodes on Ukraine and the Israel and Gaza conflict ranking high, boosted by accompanying NFL games.
Netflix dominated streaming originals in the second half of 2023. Samba TV said Netflix's strategy to overcome the actors' and writers’ strikes involved focusing on programs based on novels, real events, or docuseries, with 70% of the top 10 streaming shows falling into these categories. This trend is expected to continue into the first half of 2024 as the impact of the strikes lingers.
"On the horizon for 2024, we believe SVOD services will face increased competition from FAST and the reduction in available new content due to the strikes. Streamers need to explore alternatives to the bundling strategy, such as targeting audiences with specific interests on social media where return on ad spend can be attractive relative to traditional media.”
Meanwhile, the disruption in the TV business is forcing advertisers to respond to the challenge of optimizing reach and frequency in order to drive real-life outcomes, especially ahead of the 2024 election season, Samba TV said.
During the busiest shopping season, QSRs and retailers took the lead in advertising, with pizza chain Domino's reigning as the top advertiser by impressions. While retailers faced supply chain and inflation challenges, big box retailers such as Amazon, Target, and Walmart increased their ad spend, outpacing department stores like Macy's and Kohl's during the second half of 2023.
According to Samba TV, during the second half of 2023, 92% of ads reached just 50% of U.S. households, with the most engaged half of households bombarded by an average of 150 ads per day. Meanwhile, the other half only saw 8% of ad impressions, averaging about 13 ads per day.
Navin continued, “In what will be a record-setting year of political campaign spending, these advertisers are facing the challenge of reaching a voter base that is more fragmented and disenfranchised than ever before. This election will be determined by streaming. To reach key voters in a meaningful way, it is crucial for these advertisers to lean into a data-driven, holistic, and real-time approach to addressing both traditional TV viewers and streamers alike.”
