The digital revolution that is disrupting linear TV

The world is on the threshold of the golden age of connected television (CTV). Although CTV is relatively new in India, the pandemic has brought us to an inflection point, the beginning of a disruption. Since the launch of online video streaming services by Netflix in 2007 and the subsequent launch of internet-abled television sets by Samsung a year later, CTV has come into mainstream prominence around the world and is steadily gaining ground in India. This is only to be expected, as the large screen size of a television delivers what is arguably the best viewing experience for long-form video content. 

Even before the pandemic set in, this decade was widely expected to be the one that would transform the television experience and television advertising forever. This is proving to be true, and the transformation on the open internet will be led by CTV.  

Connected TV is winning the hearts of consumers

India consumers are increasingly preferring CTV over linear TV for the flexibility it offers – the freedom to watch high-quality content of their choice at their preferred time. As observed in the Samsung TV device ecosystem, nearly 50 per cent of Samsung TV owners in India do not watch broadcast content, but exclusively watch streaming content. 

A similar trend was evident during the lockdown, when families largely stayed indoors and looked for entertainment options that they could enjoy together. Although Indian consumers today access digital content through multiple screens and everyone wants to have a screen of their own, CTV is bringing back the joy of family viewing. According to a report by Ernst & Young, CTV is expected to expand its presence exponentially from around seven million households in 2019-20 to over 40 million homes by the year 2025. And by virtue of its rising popularity, CTV is fast emerging as the preferred advertising channel for India’s modern marketers. 

CTV advertising is essential for omnichannel campaigns

The shift from linear television to CTV is far more significant than the digital transformation of other content channels. This is because television has traditionally been the most powerful advertising channel among all, accounting for a huge percentage of the ad spends by brands. A strong television commercial gets an advertising campaign off to an impactful start and guides the budgets and the creatives in other channels. As television leverages the reach and the power of the open internet to transform into a new avatar, it will have deep-reaching impact on new-age advertising. 

Today, CTV advertising is set to become a key component of omnichannel campaigns. It is like a Trojan Horse that is quietly but surely taking brands, agencies, publishers, and consumers from a digital-also mindset to a digital-first one. Brands are increasingly looking to advertise across different digital channels where the consumer journey can be accurately mapped and understood. While linear TV allows advertisers to target viewers only at a broad demographic level, CTV enables them to apply data-driven insights to target specific audience segments based on their interests and preferences.

Winning with an advertising supported model

There is increasing appetite among advertisers to access premium CTV inventory, with brands realizing how impactful it is to have their ads appear next to premium content in an environment where there are highly engaged consumers. Consumers, on their part, are showing growing acceptance of advertising that is relevant to them.

While streaming-video content has become a highly popular and a fast-growing form of entertainment for consumers, there remains a limit on how much they’re willing to pay to access these services. So, how can the industry meet the consumer desire for varied, premium content, without a hefty price tag? The obvious solution is advertising-supported video on demand (AVOD).  

AVOD gives consumers the content they want with the freedom to choose when to watch it, without having to pay for access. A recent survey by YouGov suggests that consumers are open to this idea, with 63 percent of Indian consumers expressing the willingness to watch ads that are relevant to their interests, in exchange for free content on the open internet. This opens avenues of opportunity for AVOD services as India consumers actively seek new content, while preferring to limit themselves to only a couple of subscriptions. Ads enable streaming services the freedom to serve audiences with premium content for low or no cost. It’s a win-win-win for the advertiser, the platform, and the consumer. 

Now that TV sets have proven they’re not going anywhere, there’s no question about the opportunity that CTV presents. Smart TVs are projected to grow swiftly in India. The availability of more affordable smart TVs will drive an exponential growth in households replacing their old linear sets with smart TVs while the vast majority of new TVs sold will be smart TVs. 

While we’re still at the beginning of this journey in India, we – from hardware provider, agency, tech partner to TV publisher, will need to work closely together to make it work well for everyone as we enter this new age of connected television.