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Video Services: OTT, Pay TV

Ad Distribution Across A Wide Range of Channels - Programmatic Television Advertising is a Growing Trend

Programmatic television advertising is growing more prevalent in the advertising industry. Using algorithms and computers, programmatic advertising is the practice of acquiring digital advertisements repeatedly. Programmatic advertising allows an organization to distribute its advertisements across a wide range of channels at its discretion. Additionally, it addresses the necessity for increased ad reach due to shifts in use habits among audiences. These advertisements are referred to as in-stream advertisements. They may be shown as many times as the organizer desires, increasing reach towards the target audience. Due to the rise in the number of advertising dollars flowing to streaming audiences, CTV has cemented its place as a reliable and successful medium for establishing brands and driving performance marketing results while reducing the amount of money wasted.

Some traditional pay-TV providers provide their video subscribers OTT service access through bundling alliances to retain users and their associated revenue inside providers’ walled gardens. According to Parks Associates, the traditional pay-TV customer base in the United States will have declined to fifty-three million homes by 2024. As the customer base continues to move, conventional pay-TV service providers must modify their various strategies and services to remain competitive and provide appealing video content when and where the consumer wants to consume it.

As far as distribution and audience reach are concerned, local news organizations are increasingly turning to over-the-top (OTT) and streaming options where available. These last two years have seen a significant rise in the availability of local news through OTT devices, services, and aggregators. Increasingly new CTV devices (like Amazon's Fire TV) come pre-installed with access to news services and channels like Tubi and Xumo that are already accessible through streaming TV providers.

Traditional pay-TV systems have long given users access to local broadcast channels. Because of current broadcast contracts, some online video providers are unable to deliver local broadcasts on par with traditional pay-TV providers. There is an affiliate relationship between the local TV station and the four main broadcast networks, and each requires a separate contract with each provider. Parks Associates recent consumer research reveals what content traditional pay-TV consumers enjoy the most and which content genres would be hardest to give up.

Consumers tune in to conventional pay-TV for local programs, the primary draw. Local news and weather are critical to the success of broadcasters. There are several stations in the local broadcast industry that want to make all local information available on online streaming services.

This is an excerpt from Parks Associates OTT Video Market Tracker, a monthly and quarterly deliverable, written by Eric Sorensen, Sr Contributing Analyst, Parks Associates. For more information on this or other research visit

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