Connected TV is poised to surpass linear TV in prime-time upfront ad spending for the first time this year, marking “a pretty substantial” tipping point for the television industry, our Ross Benes said at EMARKETER’s Ad Buyer Strategies summit.

While traditional linear TV still commands billions in other dayparts and syndication, the shift is symbolically important because “Prime Time linear TV is the genesis of the upfront, it’s what started this whole thing,” said Benes.

Ross Benes speaking at EMARKETER's Ad Buyer Strategies Summit

The crossover comes as streaming inventory expands rapidly and ad pricing softens.

“We’re going to see ad prices decline,” Benes said. “Even though we’re seeing ad volume increase and more going towards streaming, the increase in ad supply from all these streamers having ad tiers, and more [viewers] choosing ad tiers, has suppressed prices.”

Pricing will be “flat to declining, except for in live sports, where we’ll see a little bit of an increase,” Benes added.

Smaller advertisers fuel CTV growth

One of the biggest drivers behind CTV’s expansion is the influx of smaller advertisers into the market.

“The upfronts, that’s more about big brands, big commitments, but a lot of the money coming into CTV as total is coming from brands spending under $10 million a year,” Benes said.

A major contributor is the number of programmatic buying tools that are making television advertising more accessible to smaller businesses.

Still, Benes cautioned that CTV’s advertiser base is unlikely to rival the scale of digital advertising giants. “I doubt that CTV is ever going to approach Google or Meta in the number of advertisers it has,” he said. “There’s still somewhat of a bar [to CTV advertising], but that bar has been lowered quite a bit.”

Ad-free streaming viewers become increasingly rare

As more streaming services push consumers toward lower-cost ad-supported tiers, fully ad-free audiences are shrinking fast.

“Ad-free viewers are becoming extremely rare,” Benes said. “You can basically reach anyone now.”

The speaker estimated that “less than 50 million US adults are going to be completely ad free on their SVOD subscriptions,” while noting that even those viewers are still reachable through platforms like YouTube, Tubi, Roku home screens, or live sports streams.

• The number of ad-free OTT video subscribers will reach 47.3 million in the US, according to EMARKETER’s forecast.

The industry’s largest subscription streamers—including Netflix, Disney+, and HBO Max—remain less dependent on advertising than peers such as Peacock and Amazon Prime Video.

“They don’t necessarily want to catch up too fast, because they are making much more money from subscriptions than they do from advertisers,” Benes said.

Still, the broader trajectory is clear: “There’s going to be really large scale CTV ad businesses,” with “a handful of services soon with over 100 million ad supported viewers.”

Streaming subscriptions near another milestone

Benes also highlighted another turning point: Streaming is on track to account for the majority of video subscription revenue.

“We’re also coming up on a milestone soon where streaming is going to take up half of subscriptions for video,” he said.

Even when including multichannel video services (MVPDs) such as YouTube TV, Philo, and Fubo, “the total subscription revenues from standalone streaming services will soon be the majority,” said Benes.

At the same time, more consumers are moving away from live TV bundles altogether.

“There’s going to be more people who don’t pay for live TV than do,” Benes explained. “Even if you include all of them, there are more people not watching live TV than there are who do.”

Advertising remains the lagging indicator

While CTV has take over linear TV in time spent, ad spending and ad impressions are taking longer to shift because of lighter ad loads on streaming platforms.

“All of linear is ad-supported, 15 minutes of ads per hour,” Benes said. “That’s much different than being on a streaming service where a third of your audience may not be ad supported [and viewers see] two to six minutes of ads per hour.”

Still, Benes argued that the final tipping point is inevitable.

“It started first with viewership, then time spent,” the speaker said. “Now we’re at a point where subscriptions are mostly going to streaming. Next it’ll be ad spending, and then ad impressions.”

Measurement and outcomes take center stage

As TV buying becomes increasingly automated and digitally transacted, marketers should expect a growing focus on outcomes-based measurement.

“As inventory becomes digitally sold, rather than manually, you’re going to have different demands for measurement,” Benes said. “That’s why you hear a lot of talk about outcomes right now at the upfronts.”

Despite the advertising momentum, subscriptions still underpin the economics of television.

“Two thirds of revenues going towards streaming and going towards linear TV for that matter, are still subscriptions,” Benes said. “They’re still the fees that you pay with your credit cards, and that matters a ton.”