CES 2020 Trends: OTT, CTV & 5G

Heather Clark, Global Director, Creative Strategy, VDX.tv

For four days last week, more than 170,000 individuals headed to Las Vegas for The Consumer Electronics Show (CES), one of the biggest tech events of the year. While flying taxis, robot toilet paper dispensers and similar new wave prototypes and concepts across the tech world dominated some of the excitement, we also saw an incredible representation of digital and TV ad-minded professionals.

While I learned the importance of both sleep and very comfortable shoes, CES 2020 provided a few particularly insightful tips into the near to mid future of advertising across both the digital and Over-the -Top (OTT) space that I think resonated throughout the show and many of the featured panels and conference tracks. Below are the top three takeaways I noted from this year’s show:

2020 is an inflection point for OTT and the Connected TV (CTV) space

The future of digital advertising is video and is where we are seeing the most growth – across all screens. This will be an important pivot for both brands and content providers to consider.

Linear TV will also continue to get better and smarter to keep ad dollars on their services. Some of the content creators and providers have recognized and immediately reacted to this shift in consumer preferences. We saw the release of Disney+ late last year and the anticipated upcoming streaming services Peacock via NBCUniversal and HBOMax from WarnerMedia. We also see some providers looking to add more dynamic content to the space, breaking out more local news and creative bundles of channels and apps to provide consumers with more options.

These content creators are also getting more creative with their executions, recognizing that consumers are reacting to their content differently across their devices. For instance, the mobile experience might need to differ than that of watching the same show via your SmartTV. Consumers are used to a separate experience on their phones compared to their TVs, and we need to embrace that and change how we are sharing content. There is a constant consideration to provide a holistic experience, activating devices all around you, even adding features to headphones like AR interactivity points. Content creators are at the forefront of this experience, and it is a very exciting time to watch closely and see what comes next!

Consumers will have significant power

This year will also be crucial in fully understanding consumer preferences and expectations. More consumers are looking to access content on demand – watching what they want, when they want it; and many of them cannot afford to double their cable bill subscription and streaming services to do so.

Some research suggests we see ~30% of consumption on CTV, and a fraction of ad spend on those devices, therefore there is an anticipated and necessary shift in spend to meet the consumers at the consumption point. We are seeing a rapid growth within the OTT space; looking at an event as recent as the Golden Globes, streaming services dominated the TV category nominations and winners.

Consumers will continue to react and favor services that have the best experiences for them. We see content vary by platform but ease of access will continue to drive favorable patterns. While platforms enable content, most consumers are looking for new content and this will drive how content providers build their platforms. While most consumers may still lean towards subscription video on demand (SVOD), it will be interesting to see if there is a shift to more advertising-based video on demand (AVOD).

5G is coming, and it may change everything

We have been awaiting the long-promised arrival of 5G, and are beginning to see just how impactful it could be. While there is still some spotty service at current state and lack of full adoption by consumers, with the promise of reduced lag times, increased reliance and much faster data speeds, this could prove to be the change that we need to see the consumer shifts we anticipate.

At CES 2020, there was everything from cars automatically enabled to communicate with their surroundings to the simple, yet beneficial improvement of connectivity and service in certain rural areas. 5G could even provide significant impacts on the way we view TV. Currently, many people are keeping linear TV subscriptions and cable providers for the sports packages they provide. With the promised speed enhancements from 5G, we could see many of these local and regional packages seamlessly move to streaming services through various partnerships and packages.

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