The U.S. Internet TV Market is Growing; Here’s How to Capitalize on it
The American Internet TV market is booming and is expected to continue to grow by 60% within the next five years. In return, OTT TV episode and film revenues are achieved $94 billion in 2026– nearly double the $49 billion generated in 2020. Media companies are currently in the midst of an incredibly competitive and fragmented market.
There is a risk that media companies will be left behind if they don’t react quickly enough to the changing landscape. However, this is also one of the most exciting times for the industry and its potential shows no signs of slowing down, making this a great time to explore new avenues of growth and broaden horizons in the space.
Owned-and-operated (O&O) services alone are no longer enough for media companies to thrive in today’s streaming environment. To achieve growth, media companies must ensure they incorporate an effective business strategy that puts diversification at the heart. When executed correctly, these strategies will enable greater audience reach and monetization that will enable them to thrive now and into the future.
In this article, I will outline how to implement a hybrid approach and the key areas to consider for media companies looking to grab a piece of the growing Internet TV market.
The options available
Free Ad-Supported TV (FAST) linear services have grown in popularity in recent years. We are now seeing FAST integrated into television interfaces and made widely available in Connected TV (CTV) app stores.
Linear FAST channels are a key hub for diversifying sales and monetization. They retain the lean-back benefits of traditional linear television while enabling valuable new digital advertising opportunities. Through FAST, content providers can unlock the potential to algorithmically program channels, use AI to cater to viewer tastes, and use programmatic advertising platforms to maximize the value of commercials. Channels can also be launched quickly and content fine-tuned in real-time to optimize viewership. As customer demand fluctuates, the FAST channels can be scaled up and down. This is a key advantage to keep content providers in control.
Additionally, SVOD services should consider offering different payment options — perhaps lowering the fee in return for some form of advertising — to help target audiences with diverse needs. This is of course a hot topic in the industry and allows companies to generate new advertising revenue that was not previously part of the business model. The price reduction gives cost-conscious customers more choice and can potentially attract more subscribers in the long run.
To support this, ad-based video-on-demand (AVOD) is also a tempting avenue. Like FAST, AVOD is also seeing significant growth. AVOD viewers are in the US expected to reach 165 million in 2025 (opens in new tab) and the format can be a great distribution tool for a media company’s content library. AVOD generates significant advertising revenue, helps companies become more competitive in the marketplace, and bundles O&O services. AVOD helps bridge the gap between an ad-free experience provided by subscription services and linear television by offering the best of both worlds.
AVOD is now a dominant player in the Internet TV market and brands are investing in these services for their user-centric focus: lower number of advertisements versus higher commercial perception value among viewers. AVOD’s ability to track user interactions can help make ads more trackable and easier to determine their success. These advanced targeting capabilities are exactly what the market is looking for today – both the advertiser and the consumer.
If implemented successfully, ensuring media companies stay focused on content and their technology stack, AVOD will surely help content thrive in the streaming age.
Ensuring the right toolset
To build and maintain thriving content communities in our industry, streaming providers should ensure they offer the flexibility to support multiple business models that reflect our market and its ever-changing landscape. The solutions must have features including the delivery of high-quality OTT applications and dynamic playlists for VOD. Support for AVOD and SVOD must also be considered, two services that are rapidly changing the way videos are consumed and monetized. However, SVOD requires a workflow, AVOD another, FAST channels another, and the many potential syndication partners require more.
It’s important to understand that to stay ahead of the curve, media companies need the right cross-platform technology to support hybrid business models and multi-partner distribution to execute a successful distribution and monetization strategy.
With this in mind, streaming providers need to ensure they are assembling a broad technology stack of solutions to realize their full audience retention and monetization potential. At the same time, however, they need an efficient way of working that avoids the complications of dealing with many vendors at the same time, making the workflow difficult to manage.
But if they do, then there’s a fantastic opportunity to reach new audiences, generate larger revenue streams, and pave the way for long-term success.