In 1941, was broadcast the first advertising spot in the United States. The brand, Bulova watches and the occasion, A quintessentially American baseball game between the Brooklyn Dodgers and the Philadelphia Phillies. Watch it here. From that moment, television and advertising began a close relationship. Both evolved together, adapting to cultural and technological changes, but always closely linked. Although, in recent years, it seemed their paths had diverged, they’ve reunited, proving that their bond remains as strong as ever.
Since the introduction of advertising to TV in the 1940s, various models of TV services emerged: state-run free channels, privately-owned channels with advertising, cable, pay TV, and more. However, one constant remained across all these models: interruptions during programming to make way for advertisements.
This advertising was composed of ad blocks where multiple ads were shown consecutively. Once the block ended, the program being broadcast was resumed, whether they were live programs, series, movies, etc. since its appearance within the TV environment, advertising has been developing and evolving (little, let’s not kid ourselves), trying to introduce new advertising models associated with content: sponsorship of programs, sponsorship of sections, product placement integrated in certain content, etc.
At the end of the 20th century and the beginning of the 21st, a revolution arrived. In 1999, Netflix, which initially operated as a movie rental video store, launched a disruptive model: users could pay a fixed monthly fee to access a catalog of ad-free content. For the first time, TV offered entertainment without advertising interruptions.
Netflix not only offered a new model, but also a philosophy that deeply resonated with the audience, (even if those of us in advertising didn’t fully believe it):
This approach resonated so strongly that other platforms followed in its footsteps, somehow cursing the “terrible beast” of media: advertising. Thus, a pure SVOD (Subscription Video on Demand) model emerged, seemingly defining the future of audiovisual entertainment.
For years, streaming platforms focused on increasing their subscriber base—exactly what Wall Street and investors demanded. During the global COVID-19 pandemic, subscription-based streaming services thrived:
Naturally, this delighted investors, and platforms experienced a golden age (2020–2022) in terms of market valuations.
In this context, no one anticipated the model would change. But, as is often the case, sustained growth had its limits.
As audience numbers and content consumption grew, streaming platforms faced a significant challenge: the need to expand their content libraries, particularly with original productions. This drastically impacted profit margins. To address this, streaming services began raising subscription fees and implementing measures such as restricting account sharing. However, these measures had their limits. Continuous price hikes were not sustainable without losing subscribers, and households reached the limit of what they were willing to spend.
This led pure SVOD platforms to rethink their strategies. Netflix, Disney+, HBO Max, and others began introducing ad-supported plans. Ads even began appearing during live events, paving the way for a hybrid model. Today, these companies expect advertising to account for up to 30% of their total revenue within the next three years. This marks a radical shift in the philosophy of streaming platforms. What was once deemed “unthinkable” has now become a strategic necessity to maintain profitability and satisfy investors. If this forecast holds true, advertising will not just be a complement but an essential driver of future revenue for these platforms.
The story of TV and advertising reflects the adaptability of the audiovisual sector. What began as an inseparable relationship endured a temporary breakup, only to reconcile years later.
In a world where business models are constantly evolving, advertising proves it remains a fundamental pillar for the sustainability of the Industry. While platforms tried to “escape” from it, they have ultimately embraced it once more, realizing that advertising is a key piece for growth and the delivery of quality content.
While TV has reinvented itself over the past two decades in many ways—broadcasting technology, types of content, production methods, and more—it is now time to rethink and revolutionize how advertising is displayed within this environment.
At tvads we has a professional team able to advise you on this field and and guide you in any area of your streaming advertising business, advising you or even operating it on your behalf if necessary
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