Though cord cutting is on the rise, barely 7 million households have made the change as we enter 2019. This is not even 10% of the national cable TV market share and the potential here is clear. In 2018 a host of new stream services popped up and the amount of bundling increased.
The competition is great, but it fractures the audience into insignificant segments that are not attractive enough to normal broadcast or cable television advertisers. What ends up happening is that there are far few buyers on for the airtime. Those that do purchase run a limited set of ads and those get ran over and over.
Personally, this is very frustrating as you here them so often that they become a distraction. Oddly, the repetition is so often and obvious that it can’t help but stand out. It’s so bad that it even drives people to write blog posts about them. Go figure.
If you are thinking there must be a huge opportunity here, I am sorry to say you are wrong. This really is a matter of scale, there is simply not enough money for them to figure out how to customize everyone’s streaming experience. You can sure as hell bet they are way ahead of that curve especially with players like Google, DirectTV and Hulu Live who already have mounds of data on everyone.
Privacy concerns could hurt the value proposition of air time
The war over personal data has barely started with rumblings of regulation and antitrust in 2018. It is only a matter of time before a major pushback on privacy issues. The ability to target might end up having to go back to a by show and channel basis for the most part. This doesn’t seem so bad at first, but getting away from that model is one of the big potential benefits of streaming TV services.
I’ll explain. The more granularity you have with options for advertisers, the more people are able to get in on the action. That means more voices in the marketplaces which is provides a very healthy competitive component. Traditionally the budgets needed to penetrate TV is beyond most companies. This crowds out well over 90% of entities who advertise.
There Are Major Technical Challenges
Not to downplay the complexity of the task, there are a number of challenges.
Commercial breaks are hard to predict – They are of standard length, but not standard start times.
You need to run commercials on-demand in real time – These are hard breaks they are dealing with, but when you switch to the channel there might be only 4 seconds left. What do they serve in this case?
Who’s watching? – TV has been a household tracking metric for the most part. We may each have our own viewing habits, but knowing who exactly is watching the family TV is not possible. This will go down over time as individual device streaming creates individual profiles from an early age.