LG's Tony Marlow On Why Ad-Supported TV Has Proven To Be An Enduring Model
In this latest video from our CTV By The Sea series, sponsor LG Ad Solutions' CMO Tony Marlow talks about the history of ad-supported TV, its comeback during the pandemic, and why it has proven to be such an enduring and popular model.
TONY MARLOW: I'm fascinated with the history of TV and media, and in fact there was a moment that I think changed everything.
So in the summer of 1941, the first ever TV commercial was aired. It was in the US and it was a 10-second commercial for a watch, and it aired during a baseball game. Now this arguably is the moment where television changed. Because the introduction of television brought sight, sound and motion into homes. The introduction of the television ad resulted in an explosion of content because the ads were now funding the TV model, and it's actually a model that we see live to this very day.
Over the last three years we have seen a prolific shift in how people consume television. So if you rewind back to the start of the pandemic, most people were following stay-at-home guidance. We had people staying at home, they were consuming more media, they were consuming more television, and they started to watch more streaming television. And this was a fundamental shift. Here at LG Ads we call it "The Big Shift" — and actually it was the first phase of The Big Shift: rapid adoption of the streaming model of TV.
At that point in time it was really characterized by subscriptions. Now, we're seeing a return to what we saw with the watch ad back in 1941— people are starting to prefer ad-supported models of streaming television and that's what's changing right now. We've got some research to indicate 80% of American TV viewers use free ad supported streaming services.
And that might not be surprising to many, but the thing that really surprised me is that 63% actually prefer it. So if you, again, rewind back to the onset of the pandemic where mostly it was subscription-based consumption, I think if you would have asked people at that moment in time, there probably would have been widespread rejection of the ad-supported model.
But as people's repertoire of apps, as the subscription fees started to add up, people were starting to say "Look, I want more content but I don't want to pay more."
And right now they're getting their content, they're getting it for free, and they're starting to have a preference for the ad-supported model.
