SVOD continues to strike telling blows against TV
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

SVOD continues to strike telling blows against TV

One day, we may look back at 2018 as the year that the TV industry, so long an imposing figure in the media landscape, began to topple. Of course, the signs have been visible for years – the rise of streaming services, the trend towards cord cutting – but last week, something dramatic happened: TV ad spending turned negative for the first time since the recession.

graph 0304 svod

For TV, ad-revenue is everything. It’s decline – forecast to continue to 2021 save a small positive blip in 2020 due to the next U.S. electoral cycle and the Summer Olympics – indicates that sponsors have lost faith in the medium. Even worse for television execs, TV’s decline stands in contrast to the wider advertising world. And within that world, there is one clear outperformer: digital, whose piece of the pie is set to increase by 19% this year. 

graph 0304 svod2

If the big TV networks – which still wield considerable power – don’t get their act together, they will become a distant memory. Their Streaming Video On Demand (SVOD) competitors are going from strength to strength. Despite a challenging month for FANG stocks generally (Facebook, Amazon, Netflix, and Google), Netflix is still up by an incredible 46% so far this year.

Meanwhile, even in the face of social network scandals, and the introduction of increased EU oversight regarding what online services can and can’t remember about their users, digital spend is on the rise.

Google and its peers are offering a more powerful, better-targeted, advertising service than TV at a fraction of the cost. Netflix, and its peers, are offering award-winning original content, once more at a fraction of the cost of a full TV subscription service. In a world where these services have already achieved incredible penetration, how much space does this leave for traditional TV?


Dominion holds Netflix, Amazon, and Google, in its Global Trends Ecommerce Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.