A new report released by Morgan Stanley indicates that overall ad spending in the US will grow by six percent in 2018, which is slightly revised from an earlier 5.9 percent growth forecast. However, the report also states that the areas of decline outnumber the areas of growth.

The report states that Facebook and Google are driving 95 percent of online ad growth, growing the market share year-over-year through their massive scale. The research team at Morgan Stanley, headed by analyst Benjamin Swinburne, also mentions that cyclical events such as the World Cup, the mid-term elections and the Winter Olympics helped to lift the forecast.

TV upfront 2018-19 pricing is expected to grow nine to 10 percent, but double-digit declines in ratings may leave upfronts at a loss. According to the report, TV ratings are down 30 to 40 percent compared to the last five years.

Swinburne writes that having broadcast networks, particularly NBC, reduce their advertising inventory could drive additional scarcity, leading to higher upfront units sold compared to the previous year. In contrast to primetime television, Swinburne points out that sports, most notably the NFL, has an increase in supply so that pricing is “less robust.”

With all this in mind, Morgan Stanley states that the viability of TV depends on its ability to monetize OTT and implement addressable ads.

“The modest declines seen in underlying TV advertising are a testament to TV’s audience reach and pricing power,” wrote Swinburne. “Historically, the growth in OTT consumption was led predominantly by adoption of ad-free platforms like Netflix and Amazon Prime Video, but appetite for ad-supported premium TV content is evidenced by Hulu (over $1B in advertising annually) and Roku (more than doubling its ad sales off a small base to $160M in 2017).”

However, there is plenty of room for growth in OTT, even as platforms like Netflix continue to grow. Morgan Stanley’s eighth annual Streaming Video Survey, released in June, confirmed that subscription-based VOD platforms such as Netflix are fueled by massive investments in original content. Netflix subscriptions added 7.4 million new members by the end of its 2018 first quarter, 2 million from the US alone, totaling 7.4 million subscribers worldwide. The company plans to spend $8 billion on programming this year to possibly grow even further.

But the survey also points out that users tend to subscribe to multiple services, with about 46 percent of Netflix users stating that they also watch Prime Video, while 58 percent of Prime members subscribe to Netflix. Additionally, viewers that use either platform are far more likely to subscribe to other over-the-top services, with 16 percent of Netflix users also subscribing to Hulu, which could be good news for media companies such as Disney and Warner Bros., which are both in the process of developing their own OTT platforms.