Is it simply me, or do third-quarter earnings all the time appear particularly unusual?
My idea: It’s as a result of they’re usually launched on the finish of the yr, however most don’t include any precise end-of-year insights, giving them an odd sort of liminal high quality. (You understand, like attempting to do work throughout the holidays.)
Am I waxing too poetically about legally required monetary statements? In all probability. However even when it feels too untimely, these bigger patterns are nonetheless price investigating.
Right here’s what I’ve observed to this point this yr within the TV and CTV promoting landscapes. Consider it as a preview for AdExchanger’s forthcoming finish of 2025 protection, if that helps!
Linear TV continues to falter
Between comparisons to the Summer time Olympics and the US presidential race final yr, 2025 was all the time going to really feel like a letdown, particularly throughout Q3. Nevertheless it’s nonetheless shocking to see simply how a lot margins have dropped. It looks like double digits throughout the board.
For Paramount Skydance, promoting income declines led the corporate to fall 12% in its TV income yr over yr. Warner Bros. Discovery, which hosted the Olympics in worldwide territories on HBO Max, confronted an excellent greater decline of twenty-two% in linear TV.
And Disney, which begins its fiscal calendar 1 / 4 early (and, thus, already lives sooner or later), posted a 16% YOY decline in linear community income for Q3 and a 12% decline for everything of 2025.
Nonetheless, it’s too early to put in writing off linear TV as a channel solely. These elements of the enterprise nonetheless are inclined to generate probably the most income – with some notable exceptions, like Netflix (which by no means had a linear arm to start with) and Disney (which is posting 3 times the quantity of direct-to-consumer income in comparison with international linear networks).
AVOD is little however fierce
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That being mentioned, streaming income helps to offset linear declines, particularly now that each main broadcaster has no less than one profitable platform of their roster. Even Fox launched its new Fox One service in August and, on the similar time, lastly turned a revenue on FAST channel supplier Tubi.
Throughout the trade, ad-supported subscription tiers are rising exponentially – regardless that, to borrow a phrase from Netflix, they’re “off a comparatively small base.”
Thus far, it looks like corporations which have prioritized unifying and managing their very own advert tech stack are having probably the most success with it. Take a look at Disney, which constructed its personal proprietary advert server for Disney+ and Hulu from the bottom up manner again in 2020 and now makes use of the identical stack for its new ESPN streaming service.
On the opposite finish of the spectrum, Paramount Skydance, which has but to unify its personal tech stack for Paramount, Pluto TV and BET+, is making most of its streaming cash on subscribers, not commercials.
Sports activities? Sports activities!
Again to ESPN for a second. Whether or not or not sports activities needs to be folded into the principle streaming providing or cut up out right into a separate platform is beginning to turn out to be an industrywide differentiator.
NBCUniversal has gone the direct route with Peacock, and Paramount+ and Fox One are doing the identical. However WBD, which has been providing sports activities on HBO Max up thus far, nonetheless plans to change issues up with a brand new TNT-specific app. In response to what CEO David Zaslav informed advertisers final week, they have an inclination to see extra monetary success with sports activities as an add-on anyway.
Disney, in the meantime, is seemingly attempting to have it each methods. Viewers can watch sports activities by way of Disney+ with an ESPN subscription, however now there’s additionally a separate ESPN+ app, just like how Hulu content material exists throughout a number of platforms. However, as CEO Bob Iger shared throughout Q2 earnings, the standalone Hulu app is being phased out subsequent yr.
This transition additionally raises some questions on sports activities streamer Fubu, which is formally being merged into Disney’s Hulu + Stay enterprise – that means that it, too, would possibly find yourself getting folded into one platform or one other sooner or later.
Both manner, one factor feels sure: advertisers are going to observe these sports activities wherever they find yourself.
Questions? Feedback? Drop me a line at victoria@adexchanger.com.
