Viewership and ad dollars keep shifting from TV toward digital video. But streaming services are finding it challenging to reign in costs and convince more people to pay subscription fees. Inflation and the stagnating economy are disincentivizing people from subscribing to more entertainment products, which is a problem for streaming services seeking profitability. The stability of the streaming space will be tested in the coming year.

Streaming Will Catch Linear TV in Time Spent Before Ad Spending

TV ad spend still significantly exceeds streaming’s spend. In 2023, US subscription over-the-top (sub OTT) ad spend will reach about one-sixth of linear TV ad spend. Streaming offers more ad-free options than TV—and when ads are present, loads are lighter.

Subscription streamers aren’t as reliant on ads.

• Paid streaming services are funded more through subscription fees than ad revenues.
• But ads are becoming a bigger part of paid streaming services’ business.
• Even Netflix features advertising now, and Disney+ is introducing its ad-based tier on December 8.