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(Veteran tech columnist Jon D. Markman publishes Strategic Advantage, a lively guide to investing in the digital transformation of business and society. Click here for a trial.

I write a lot about television and advertising because something really big is happening. Tremendous fortunes are being earned as the monetization of media transitions from linear to connected.

Magnite ( (MGNI) - Get Magnite Inc. Report) managers announced Friday the $1.17 billion buyout of SpotX, a video and connected TV firm. Despite the extraordinary price, Magnite shares surged 26% to a record high.

Connected TV is the future of ad-based television, a $260 billion market in 2020.

Powerful players are lining up on both sides of this transition. Apple ( (AAPL) - Get Apple Inc. Report) is waging a public relations battle around privacy. Tim Cook, chief executive officer, seems to take pot shots weekly at Facebook ( (FB) - Get Meta Platforms Inc. Report) and Alphabet ( (GOOGL) - Get Alphabet Inc. Report), two firms he argues are practicing surveillance capitalism.

The pitch is big technology firms that sell advertising around the use of their platforms are really selling the privacy of their patrons to ad buyers, the real customers. This is a fundamental mischaracterization of advertising. It also supposes consumers would gladly pay for a no-ad version of those services if given the choice. They wouldn’t.

Disney ( (DIS) - Get The Walt Disney Company Report) operates Hulu, a tiered subscription video on demand service. Members choose the free, ad-supported service by a ratio of almost 3-to-1. When Comcast ( (CMCSA) - Get Comcast Corporation Class A Common Stock Report) managers started Peacock, its VOD service ads quickly became the central focus. And paid subscription interest in Apple TV Plus, Apple’s SVOD were so poor during launch the iPhone maker ended up giving the service away for free to buyers of its consumer electronics products.

Ad-supported business models work because the overwhelming majority of consumers simply refuse to pay for multiple paid media sources.

That’s why Magnite executives, an advertising technology company, are so willing to pay up for SpotX. Connected TV, the digital equivalent of tradition linear TV, is not going away even if powerful companies wish it so.

I first wrote about Magnite in March 2019. Back then it was called the Rubicon Project, a smaller adtech business with a market capitalization of only $356 million. I recommended buying shares in the troubled business on a pullback to the $5 range. Like so many adtech businesses, managers had bungled web based advertising with annoying popups and video ads that started as soon as the page opened.

Connected TV is a fresh start.

Adtech allows marketers to know the demographics of who is watching, for how long and if they ultimately clickthrough to buy the product. Linear TV is scattershot at best, like billboards posted along the side of the road.

Even cable TV companies are scrambling to move online. New WiFi enabled set top boxes and unlimited internet is a trojan horse. Pushing content online means the chance to sell targeted ads and maybe slow the revenue bleed from cord cutters shifting to Netflix ( (NFLX) - Get Netflix Inc. Report) and other VOD services.

During 2020 eMarketer estimates that 6.6 million consumers dropped their cable TV subscriptions.

Meanwhile content providers are moving online, too. Last November ViacomCBS ( (VIA) - Get Via Renewables Inc. Report) managers began moving 425 linear broadcast channels and 40 media centers to Amazon Web Services. The transition will make it easier to create new virtual VOD channels on the fly, then monetize them with targeted ads.

The common denominator is adtech and CTV.

Combining Magnite and SpotX creates a formidable business. According to the corporate press release, the new firm will have inventory agreements with a cadre of content providers and device makers including Discovery Communications ( (DISCA) - Get Warner Bros Discovery Inc Com Ser A Report), Disney and Hulu, ViacomCBS, Fox (FOX) Corporation, Activision Blizzard ( (ATVI) - Get Activision Blizzard Inc Report), fuboTv ( (FUBO) - Get fuboTV Inc. Report), Roku ( (ROKU) - Get Roku Inc. Report), Samsung, Sling TV, and Vizio.

In an SEC filing in November Magnite managers noted he number of advertisers using its CTV targeting during the third quarter increased 250% year-over-year. CTV revenues grew to $11.1 million, up 51% from a year ago.

The company is riding a megatrend of ad dollars shifting away from linear TV to ad-supported VOD. Despite vocal opponents all of TV is moving in that direction.

Shares are up 1,018% since my 2019 recommendation. Corporate finance has pushed the market capitalization to $6.3 billion, yet this trend is far from complete. Growth investors should consider buying pullbacks.