Back in the day, watching your favorite movie or TV show meant carefully planning your schedule to be in the living room, glued to the TV. Many of us still remember the battles over the remote when two family members wanted to watch different shows airing at the same time. Thankfully, those days are behind us. Now, we can stream, rewatch, pause, and rewind content whenever we want.
The first big shift came in 1999 with TiVo, a game-changer that let you record TV shows and watch them at your convenience. But the real revolution arrived in 2005 when iTunes allowed users to download and watch video content on their own devices. Then came the ultimate disruptor: Netflix. With its streaming service delivering all kinds of content directly to our devices, it changed the way we consume media forever.
Since then, major tech giants like Apple, Amazon, and Google have stepped into the game, launching their own streaming platforms and devices. The result? A surge in connected TVs and a rapidly growing, fiercely competitive market that evolves year after year.
The connected TV (CTV) market was valued at $85.4 billion in 2024 and is projected to exceed $186 billion by 2034.
However, with this expansion comes increasing market fragmentation, particularly in areas like billing and user experience. This fragmentation is creating challenges for both providers and consumers, often leading to issues like subscriber churn.
In this blog post, we explore the complexities of CTV billing and offer practical solutions for broadcasters and content providers to solve those challenges.
What is connected TV (CTV)?
Connected TV or CTV refers to television devices that connect directly to the internet, enabling users to stream digital content from platforms like Netflix, Amazon Prime, and Disney+ among many others. Unlike traditional TV, which relies on cable or satellite connections, CTV integrates apps, online media, and live TV within one simple interface. Beyond video streaming, CTV also offers apps for fitness and workout subscriptions, like Peloton, and even educational platforms, such as MasterClass. Thanks to smart TVs, streaming sticks, and set-top boxes, it's never been easier to access a world of digital content.
Source: Ofcom
In order to succeed, connected TVs must appeal to both viewers and content providers. Viewers expect diverse and engaging content, while content providers won't contribute to platforms with small audiences. This is why CTV manufacturers focus on delivering a wide variety of content to attract and retain viewers while creating a desirable market for content providers.
How has the connected TV market evolved?
The adoption of CTV has skyrocketed in recent years. Household penetration of devices like Roku, Amazon Fire TV, and Samsung Smart TVs continues to grow, driven by increasing consumer need for flexible, on-demand entertainment. In fact, 88% of American households now own at least one internet-connected TV device. According to recent studies, CTV is expected to account for over 60% of global streaming minutes within the next few years, fueled by both Subscription Video on Demand (SVOD) platforms and free, ad-supported streaming models (AVOD). Interestingly, manufacturers like LG and Roku attribute most of their revenue to ad placements rather than hardwell sales, showing how advertising has become a key driver of profit in the tech industry.
For D2C subscription-based businesses, this boom offers vast potential to reach highly engaged audiences directly in their homes. With precise targeting capabilities and measurable results, CTV provides the perfect platform to drive subscriptions, boost customer retention, and build meaningful brand connections through tailored content and advertising.
However, this growing ecosystem is far from unified. Content distributors must deal with a highly fragmented market, encompassing diverse device brands, operating and billing systems, and app stores.
Challenges of the fragmented connected TV landscape
The connected TV (CTV) ecosystem is becoming increasingly fragmented, with a growing variety of hardware, operating and billing systems, and subscription models. From smart TVs like Samsung and LG to external devices like Roku, Apple TV, and Amazon Firestick, viewers have more choices than ever. Adding to the complexity, new TV operating systems are entering the market, with projections showing that 38% of the global market share in 2024 will come from emerging TV OS providers.
This diversity offers consumers flexibility but creates significant challenges for content providers. As more devices emerged, so did more billing systems, making it increasingly difficult for providers to manage the payment and revenue data from the different platforms.
What are the most common challenges in the CTV space?
Here are the most common challenges in the connected TV space:
1. CTV fragmented billing systems
Each platform—Samsung, Android TV, Roku, and others—requires unique payment integrations, leading to fragmented data, operational inefficiencies, and extra development time for providers. On top of that, providers must support a variety of global payment methods, such as universally accepted methods like credit cards and PayPal, as well as region-specific solutions such as carrier billing, Sweden's Autogiro, or Brazil's Pix. They must adapt to the unique preferences of each local market. Managing these integrations is time-consuming and complex.
|
How does fragmented billing lead to churn?
|
2. Entitlement management issues
Another layer of complexity lies in managing entitlements—ensuring users have seamless access to the content they’ve paid for across different devices. With consumers using more than one smart TV or device, tracking entitlements becomes a logistical challenge for content providers.
Fragmentation in this area often leads to inconsistent access, frustrating users and impacting satisfaction and leading to churn. A centralized entitlement management system can help resolve these issues, ensuring users can enjoy their subscriptions across devices without disruptions.
3. Siloed data and analytics
The lack of centralized data is more than a technical issue—it’s a significant business challenge. With each CTV platform offering its own performance metrics and analytics, providers are left with siloed data that’s hard to consolidate. For example, making your subscription content available on 15 different platforms means managing 15 separate billing systems and dashboards.
This fragmentation prevents providers from gaining a holistic view of their audience, revenue streams, and subscription trends. Without unified insights, it’s nearly impossible to make data-driven decisions that optimize content strategies or improve user satisfaction. Solving this issue is critical for the future efficiency and success of CTV providers.
4. Integration and compliance barriers
Connected TV integration comes with its own set of challenges, largely due to the unique limitations and varying regulations of each platform. Every system operates differently, meaning there’s no one-size-fits-all approach. For example:
- Apple TV and Amazon Fire TV enforce strict rules on in-app purchases, often requiring transactions to go through their own payment systems, limiting flexibility in using third-party payment processors.
- Each CTV platform has different SDKs and APIs for authentication, subscriptions, and playback, requiring custom app development for each platform.
- Newer operating systems may not support older TV hardware, leading to compatibility issues.
- Some CTV platforms limit third-party ad networks or require using their own ad systems. For example, Roku has ad inventory requirements, and some smart TV makers block access to competing ad exchanges. This impacts monetization for subscription services that depend on ad revenue.
Beyond ensuring smooth transactions, integrating with CTV platforms requires careful consideration of their distinct capabilities and compliance requirements.
|
Why is the CTV billing landscape so fragmented?
|
5. Inconsistent user experience
Navigating the user experience across multiple devices and platforms is another significant challenge in the CTV ecosystem. Each operating system varies in its design, programming languages, and user journeys, ultimately affecting how subscribers interact with content. For content providers, developing and maintaining apps across 15 or more platforms is no small feat.
Ensuring a consistent and intuitive UX—while managing different interfaces, remote functionalities, and navigation behaviors—can be overwhelming. The user experience becomes even worse when subscribers face billing issues or problems accessing content, leading to frustration and churn. With users accessing content via smart TVs, gaming consoles, and streaming devices, providing a unified experience across all touchpoints is essential to driving engagement and retention.
Why is a unified user experience important in CTV?
With users accessing content across various devices, a consistent and intuitive experience is key to keeping them engaged. Disjointed navigation, entitlement issues, or billing errors can quickly frustrate viewers and lead to churn.
Multi-Channel Billing: the solution to the fragmented CTV market
To overcome these challenges, multi-channel billing systems are emerging as a game-changer for content providers. These systems allow providers to streamline payment processing across multiple platforms, including connected TVs, mobile apps, and web platforms, ensuring a seamless experience for users. With the rise of CTVs as a preferred medium for streaming content, having a billing system that integrates smoothly with these devices is essential. This approach not only improves revenue collection but also enhances customer satisfaction by offering flexible and convenient payment options tailored to diverse viewing habits.
Cleeng’s Multi-Channel Billing framework simplifies the process by:
- Centralizing subscription management across different platforms.
- Aggregating data into one unified system for tracking payments, subscriptions, and performance metrics seamlessly, creating a single source of truth for subscriber data and behavior
- Simplifying 70% of the integration process by reducing integration complexities and operational overhead.
- Offering flexible pricing strategies for different demographics and regions
- Enabling synchronized promotions across all sales channels
- Automating renewals, billing reminders, and customer support
- Simplifying the addition of new integrations for future-proofing growth
This "single source of truth" approach not only reduces complexity but also saves time and resources. It empowers content providers to make data-driven decisions, improve customer retention, and gain a deeper understanding of viewer behavior across all platforms. With tools like these, navigating the fragmented CTV landscape becomes far more efficient and scalable.
Find out more about Cleeng’s Multi-Channel Billing framework or watch the interview with our Product Marketing Manager, Kubra Guven, explaining the complexities of connected TVs and Multi-Channel Billing.
At Cleeng, we’ve built a framework that brings all TvOS platforms together in one place, cutting through the chaos of the ever-changing CTV world (because let’s face it, a new platform pops up every other month). Our solution isn’t just about keeping up with what’s already out there—it’s designed to grow and adapt with whatever comes next. With one integration and clear, actionable data, we make retention planning a breeze and give you real insights into how your customers tick. It’s all about making life easier in a fragmented CTV landscape, so you can focus on what really matters—growing your business.
Are you ready to take full control of your subscription payments and analytics? Contact us today for more information!
