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Investing.com -- Streaming has officially surpassed broadcast and cable combined in U.S. TV viewing, and analysts at Citizens JMP believe the shift is only just beginning.
Citing Nielsen’s May “The Gauge” report, Citizens JMP noted that “streaming reached 44.8% of U.S. TV time, its highest share yet,” exceeding the collective share of broadcast (20.1%) and cable (24.1%).
“We believe streaming gains likely accelerate from here given the advantages of scale,” the analysts wrote.
They note that as linear TV becomes a minority of viewership, streaming services can spread content costs over a larger number of users, while sports leagues and advertisers benefit from access to broader and younger audiences.
Importantly, ad-supported video on demand (AVOD) is said to be becoming the dominant way to reach teens.
“Younger viewers have nearly all shifted to streaming for scripted television,” Citizens JMP said, noting that when they do watch linear TV, it’s mostly for live sports—“the last stronghold” of the traditional model.
Streaming also benefits from bundling and improved device access. “Netflix, the leader in subscription streaming, and Google (NASDAQ:GOOGL)’s YouTube now seeing the majority of its watch time on TVs,” the note said, adding that platforms like Amazon (NASDAQ:AMZN) Prime are leveraging bundling to boost engagement.
AVOD penetration is increasing too, said the bank. “46% of premium SVOD subscription tiers are now ad-supported,” and 73% of CTV time is spent with ad-supported content.
Still, streaming’s share of ad spend lags its share of TV time. Citizens JMP sees this gap closing, which “will drive the $45B of U.S. linear advertising budgets into CTV over time.”
Top beneficiaries are said to include Roku (NASDAQ:ROKU), The Trade Desk (NASDAQ:TTD), and MNTN, which are poised to gain from “CTV tailwinds” as advertisers reallocate budgets and the TV ad market structurally expands.