Reflecting on 2023: Streaming’s Year of Growth, Change, and Innovation

2023 was yet another year of dramatic change for the TV industry, with both expected and unexpected challenges as well as opportunities arising along the way.

It started out as a typical year. The story was familiar: Audiences continued to watch an increasing amount of streaming TV. Comscore’s State of Streaming report detailed that total streaming hours viewed grew over 21% from 9.6 billion to 11.5 billion between May 2022 and May 2023.

This increase continued to come at the expense of traditional broadcast and cable TV. According to the December 2023 Nielsen Gauge Report, streaming services not including vMVPDs and MVPD apps captured 32.8% of overall TV viewing share in January 2023, and continued to rise throughout the year, closing out November at over 36.1% share. Interestingly, November wasn’t the highest month of the year for streaming’s share. That honor belongs to the summer months after the writers and actors went on strike. (In July, streaming’s share peaked at 38.7%, and broadcast’s share dropped close to five points to just 20%).

When the Writers Guild of America walked out in May, and was soon followed by the Screen Actors Guild, production of original content halted. Now, with content development on pause, the opportunity shifted in favor of streamers and publishers who could provide easy access to library content, defined as older, already-aired programming. With literally thousands of hours of library content for viewers to choose from, streaming gained an edge over broadcast.

By September, according to TVision’s Q3 Signal Report, 90% of streaming viewers’ time was spent with “older shows.” As Variety detailed, publishers began to shake off the cobwebs from past hits like “My So Called Life” – making what was old, new again. While the industry’s biggest players like Netflix and Amazon Prime Video have access to extensive content libraries, so too do traditional broadcasters who have responded by launching niche dedicated channels for fans of shows like “The Price is Right,” “Portlandia,” and “Ice Road Truckers” – channels which are commonly categorized as FAST.

FAST channels, short for Free Ad-Supported Streaming TV, are often delivered within native apps on devices such as Roku, Samsung, or LG TVs, and provide consumers with a free selection of quality content in exchange for watching ads. Over the course of the year, it became clear that consumers were perfectly comfortable with watching ad-supported streaming content. Even streamers like Netflix, who had previously not included ads, followed suit and rolled out ad-supported subscription tiers. According to Comscore’s State of Streaming report, by 2023, for the first time, ad-supported streaming’s household reach outpaced that of ad-free streaming – with ad-supported content being viewed in an impressive 83.7M homes.

The industry’s content discoverability problem became front and center as the writers and actors strikes dragged on, and streamers and publishers could no longer rely on new, must-see programming to draw in viewers. By June, according to Nielsen’s State of Play report, there were over 1,000 FAST channels for people to choose from in the US and audiences were spending 10.5 minutes trying to find something to watch.

It’s also important to note that with the growth of FAST channels, has come the opportunity to capture market share from some of the biggest CTV apps. According to Comscore, as viewers spend more time watching streaming TV, 75% of those newly acquired hours are spent watching content outside of the top-six streaming apps (Netflix, YouTube, Prime Video, Hulu, Max, and Disney+). For publishers, this is a great indicator that viewer behavior is not as set in stone as some may have feared. Solving for content discovery, and targeted viewer acquisition campaigns could help tip the scales in a publisher’s favor.

Of course, market share of viewers should correspond to market share of ad revenue. As more viewers watched more hours of streaming, publishers also found themselves with more streaming impressions to sell, and greater pressure to capitalize on the revenue opportunity. In 2023, CTV ad revenues, as reported by Statista, continued to climb 13% year over year, though notably slower than the 26% YOY growth reported in 2022. Adding urgency, as inventory increased, CPMs also began to dip. InsiderIntelligence / eMarkerter, noted that fourth-quarter CPMs dropped 60% YOY to just $21.73 (compared to $35.06 a year ago).  

Faced with more impressions than they were successfully selling on their own, streamers and publishers turned to third parties for help. MarTech and AdTech partners stepped in to develop sophisticated audience targeting solutions that they rolled out in programmatic marketplaces. Publishers also began offering more impressions to resellers like Wurl – who could drive additional, differentiated demand and help them improve their ad fill rates.

So to recap, here’s the landscape we found ourselves in during 2023:

• CTV audiences continued to grow at the expense of traditional broadcast and cable TV

• Library content became increasingly important – what was once “old” could be “new” again for the right audience

• FAST channels multiplied, giving viewers thousands of choices for what to watch and adding to the industry’s content discoverability problem

• Viewers proved they were willing to watch ads on CTV, unlocking the ability of streamers to monetize more of the CTV experience

• Audiences followed great content – there were still opportunities to capture share, and thus more of the ad market.

• As the market matured and advertisers sought greater efficiency, publishers faced pressure to monetize their streaming inventory by increasing fill rates and maintaining premium CPMs.

Solving for CTV Content Discoverability

There is no doubt: 2023 was the year of AI. And, while applications of AI in the TV industry may not be readily apparent to outsiders, for those of us focused on solving the discoverability problem, AI became a critical part of the solution.

Wurl is uniquely situated to connect the dots between the types of programming viewers watch, what programming is a good match, and how much each viewer is worth based on the publisher’s ad-monetization strategy. Leveraging innovations in AI, we launched ContentDiscovery in May of 2023, a scalable solution for connecting viewers with the content they would love. With ContentDiscovery, streamers and content publishers optimize targeted and precisely measurable viewer acquisition campaigns – growing their audiences, increasing engagement, and reducing churn.

Ron Gutman, Wurl’s CEO, explains, “The streaming industry’s number-one challenge today is cost-effective discovery – finding the right viewers, engaging them effectively, and retaining them with content they will truly like. With ContentDiscovery, we’ve built a solution for streamers and publishers to spend their advertising budgets on high-value users who will actually convert and continue to engage with their content.”

The results have been stellar. As the technology powering ContentDiscovery learns, its efficiency improves, delivering more viewers and proving out returns in a way that hasn’t been possible before in CTV. Since all campaigns are 100% measurable, streamers and publishers have been able to track their success immediately. An early customer of ContentDiscovery, A+E Networks, recently spoke with our team about their success. Watch this video to learn more about how they cut their cost-per-subscriber in half using ContentDiscovery to promote their SVOD service, Lifetime Movie Club.

Performance Marketing Drives Higher Ad Yield for Streamers

The launch of ContentDiscovery came just one year after AppLovin, a leading marketing platform, acquired Wurl. This past year, Wurl has taken the same approach to innovation in streaming that AppLovin brought to performance marketing on mobile. With ContentDiscovery, the company is leveraging AI to deliver more high-value viewers and enable streamers and publishers to achieve greater returns. But those returns are dependent on how well streamers and publishers monetize their content. For ad-supported streaming content, this is another area where Wurl, and our parent company, AppLovin, can make a big difference.

Many of our streamers and publishers leverage Wurl’s AdPool product by placing custom tags within their advertising waterfalls, allowing them to increase their fill rates and boost CPMs while simultaneously unlocking profitable growth with ContentDiscovery. First, we ensure our publishers share the metadata that performance marketers need in order to accurately measure and target their campaigns. With that in place, we’ve successfully unlocked exclusive access to performance marketers through the AppLovin Network, representing more than $3.5B in annual ad spend. This differentiated performance-marketing demand isn’t otherwise available through typical SSPs and DSPs, and provides a competitive advantage to our partners – enabling them to maximize their revenue potential.

The good news is that performance marketers are seeing success from their campaigns on our partner streamers and publishers. As Lin Yuan, the Senior Director of Growth Marketing at Picsart explained, “We’re seeing a much higher install rate than we had originally thought possible, which has played a key role in reinforcing our standing as a top app in our category. We’ve ramped up our CTV spend and can’t wait to see the kinds of results we get in the coming months!”

With AdPool and ContentDiscovery working together, we’ve created a positive ecosystem where we can help streamers and publishers better monetize their inventory, and then profitably drive more viewers to their programming – increasing their available inventory, and ultimately their revenue.

2023 Is Just the Beginning

As we move into 2024, we are focused on supporting our partners and developing innovative technologies and services that will accelerate the shift to streaming. We firmly believe that our industry’s future won’t just be cable TV repurposed as streaming. Ron Gutman predicts, “The 2020s will definitely be marked in the pages of history as the dawn of a new age in human civilization, the Age of AI. 2023 progress in AI for connecting people to the content they love is just the beginning.” You can read more about some of our team’s predictions for 2024 here and here.

Mapping streaming’s future will depend on that powerful combination of creativity, technology, innovation, and passion – things our team has in spades. The future is exciting – we can’t wait to get there with you!