SANTA MONICA, CA – Connected television’s roots are in ad-free subscription services such as Netflix, similar to the ad-free channels on cable such as HBO. The business model is evolving as consumers look for ways to cut their spending on streaming and streaming platforms add commercial breaks among their premium content. There are differences, though.

“The biggest difference that I personally see between streaming and cable and their evolution is that streaming is so much more fragmented,” Amanda Forrester, vice president of marketing at adtech company OpenX, said in this conversation with Beet.TV contributor Mike Shields at the Beet Retreat Santa Monica. “Publishers are going to need to find even more effective ways to leverage advertising in order to support the creation of high-quality content.”

Media companies are competing with technology companies such as Netflix, Amazon and Apple that are willing to pay for premium content and bid for live sports that bring in viewers. But they’re increasingly looking for advertising revenue to help offset the cost.

“Content is getting more expensive to produce,” Forrester said. “What that means is that they really need to start evaluating how they’re generating revenue in ads more thoroughly and more quickly.”

Demand-side platforms that help advertisers buy media are moving closer to publishers through a process known as supply path optimization. Publishers must find a way to move in the opposite direction, Forrester said.

“On the sell side, people have been very conservative. They tend to use one or two tech partners in certain avenues to help them generate revenue,” she said. “They’re going to have to expand that more quickly to drive competition, to see who’s bringing them unique demand so that they can continue to generate higher CPMs or fill more of their content with ads and then distribute that more effectively.”

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