Streaming beat linear in March, but tariffs could indicate a shifting ad market

The news: Streaming outperformed broadcast and cable TV for the second month in a row in March despite an anticipated 6% seasonal decline in total TV consumption, reaching a new milestone in overall share of TV viewing, per a new Nielsen report.

• Streaming achieved its largest share to date, accounting for 43.8% of TV consumption, up from 43.5% in February.
• In comparison, broadcast accounted for 20.5% (down 9% from February), while cable accounted for 24% (up 0.8%).
• YouTube continued its success streak, reaching 12% of total TV watch time, up from 11.6% in February.
• Max saw the highest month-to-month increase among streaming services, climbing 6% in March, largely attributed to the success of “The White Lotus.” Disney streaming, including Disney+, Hulu, and ESPN+, hit 5% of total share, up from 4.8% in February.

Zooming out: The findings align with streaming trends, with both subscription OTT video viewers and ad-supported video on demand (AVOD) viewers climbing steadily, per our forecasts.

• Continued growth in ad-supported streaming is helping boost overall share of subscription streaming viewers. Viewers who choose advertising plans grew 16% between 2023 and 2024, and free ad-supported streaming TV (FAST) services like Pluto and Roku are also climbing steadily, according to our forecast.
• The shift from linear TV to streaming is causing legacy media giants like Paramount, Warner Bros. Discovery, and NBCUniversal to refine their streaming services to offset linear declines—in turn driving more advertising dollars towards streaming platforms.

Yes, but: Despite consistent gains, the connected TV (CTV) ad market may become stagnant due to ongoing tariff threats, which will have an impact on both streaming viewers and advertisers.

• Viewers may face higher subscription costs if tariffs increase the cost of streaming devices. While viewers increasingly prefer AVOD, services might have to increase ad frequency to compensate for lower ad rates, leading to a more disruptive streaming experience.
• Higher prices could further the shift toward FAST options as consumers cut down on costs.
• CTV ad spend may slow because of broader ad industry pullback. CTV generally commands higher CPMs than other video channels, per TheViewPoint, and could be an obvious target if ad budgets tighten.

Our take: Given the continued growth of streaming services and the threat of CTV market stagnation, advertisers need to continue investing in streaming—but remain agile.

• Advertisers must remember that diversification is essential. Streaming will remain critical for reaching audiences, but spreading ad spend across both streaming and linear TV will help combat market volatility.
• Potential ad load increases will make the quality and relevance of creative ads more important than ever to break through viewer fatigue. Prioritizing quality impressions over quantity will help ensure viewers continue engaging positively with streaming ads.