Collins | COVID-19 And Media Companies’ Futures

With every generation relying on media from a multitude of sources to inform and distract more than ever before, there is a huge opportunity for media companies to engage a captive audience. Forward-thinking media companies will be focused on creative solutions to keep engaging content flowing to consumers across a variety of platforms while continuing to find ways for advertisers to reach their potential customers.

As strict COVID-19 restrictions are relaxed and the country begins to reopen, media companies must plan for how they will operate in, and serve, a changed world. It goes without saying that analysts will have their favorites in the winners and losers categories. Regardless of those opinions, it’s clear that the pandemic accelerated some changes, may have reversed others, and absolutely requires questioning of every assumption.

Consumer Trends

Soon after stay-at-home orders were enacted, Nielsen projected that television usage would increase by up to 60% during the pandemic. It was correct, with the caveat that early trends varied by market, age group, and daypart.

With the shutdown continuing into April, some interesting trends began to emerge. Data from GlobalWebIndex show that consumers were spending more time with different media and online content including YouTube and TikTok (38%) and music streaming (28%). Further, 79% of those polled expect to continue using these services after the shutdown is lifted.

What is most interesting is that traditional media companies and news outlets are again the most trusted sources for news and information. Visual Capitalist and others are reporting that broadcast TV usage is increasing across all demographics. They also point to an increase in online TV/streaming among most groups. This may be the first time that some younger viewers are actively turning to traditional sources for information. Additionally, in a recent “Coffee with Comscore” webinar, the company says midday newscast viewership is up 40% in the top 25 markets.

Other consumer trends worthy of note include Accenture’s finding that the pandemic has accelerated digital adoption along with consumers’ acceptance of self-service and intelligent home devices.

Additionally, non-news content preferences seem to be evolving as stay-at-home becomes familiar. Early on, researchers were seeing more consumption of positive, feel-good options. More recently, Magid reports that while the preference for lighter content remains, they see an increase in consumption of drama and pieces with an action theme.

Finally, McKinsey finds consumers to be concerned about income instability. This tracks with several reports that, while consumers expect to spend more time with digital entertainment, they are looking to their balance spending.

Advertising Shifts

Broadcasters’ quarterly earnings reports say it all. Last week, Sinclair projected a 32%-39% decline in second quarter core advertising. When TVNewsCheck’s Michael Depp interviewed Pat LaPlatney, co-CEO of Gray Television, earlier this week, LaPlatney told him that second quarter will be tough. In fact, he said, it’s going to be a tough year.

On the other hand, LaPlatney sees some good news. He said the company’s new advertiser count for April was similar to what the company was seeing in January and February. Additionally, he is seeing creativity across all company disciplines.

These comments track with research done by Influencer Marketing. In a March 2020 survey of U.S. marketers and ad agencies, the company found that 69% of brands expect to decrease marking expenditures in 2020.

On the agency side, 65% of respondents reported a decrease in March revenue. However, there is a bright spot: 41% of companies surveyed said they planned to increase their advertising spending.

Those companies that are advertising are changing their messaging. As Vanity Fair reports, the most compelling ads are selling nothing. The author says that young people, in particular, are looking for authenticity and it would be “inauthentic not to respond in some way to the COVID-19 crisis, the elephant in the world’s room.”

Influencer Marketing’s research backs up at least part of this approach, saying 92% of consumers surveyed expect brands to continue advertising. Further, 72% want these companies to provide information that will help in their daily lives and 75% expect companies to inform consumers about what they are doing now.

Finally, 74% say companies must not exploit the situation. One thing to keep an eye on is Influencer Marketing’s prediction that advertisers will become even more focused on spending “that can show direct sales outcomes.”

Content Considerations

Content producers made adjustments soon after stay-at-home orders were issued. Disney got a lot of attention when it moved up its release of Frozen 2 on Disney+. Target Marketing also reports that Hulu offered three episodes of Little Fires Everywhere ahead of its planned schedule.

Nielsen data show that Netflix’s Tiger King drew an audience of 34.3 million unique viewers in the U.S. during its first 10 days on the service; it was one of the most popular original shows offered by the streamer.

Local news along with network programs and nationally syndicated content have all had to pivot. Last week TVNewsCheck included an article about how Deborah Norville’s Inside Edition has gone “acoustic,” shooting in the host’s living room. While there’s visual continuity with the pre-pandemic show, the production is more streamlined and the focus has shifted slightly to include more inspirational stories.

According to Motley Fool, the video game industry is one segment of media thriving during this period of self-isolation. It explains that data from Verizon show games usage is up 75% during peak hours. Unfortunately, while it would seem that video game production would be the easiest to transition to work-from-home, The New York Times reports that employees still must contend with the realities of burnout and family distractions.

Focus for Media

And there’s the rub for media businesses. Users are consuming vast quantities of new content while production companies are limited in what they can produce. An April 24 article in Variety details a production-resumption proposal from producers Brian Kavanaugh-Jones and Chris Ferguson. The document, which the article’s authors say is still a draft and likely one of many proposals under consideration now, outlines stringent rules to minimize the potential spread of the coronavirus.

Explaining significant potential changes to everything from cast and crew to the handling of props, makeup, and costumes, the authors point out that many of today’s popular films simply could not be produced this way. The rules favor productions that require more in the way of “post-production rather than physical production.”

With every generation relying on media from a multitude of sources to inform and distract more than ever before, there is a huge opportunity for media companies to engage a captive audience. Forward-thinking media companies will be focused on creative solutions to keep engaging content flowing to consumers across a variety of platforms while continuing to find ways for advertisers to reach their potential customers.

To protect our members while still providing them with the industry information they count on, MFM has turned its 60^th annual conference, Media Finance Focus 2020, into a 10-week virtual event. Each week, beginning on Tuesday, June 16, registered attendees will be able to select from four industry-specific sessions. Included in the agenda will be two sessions from Deloitte, during which the firm will share insights from their newly revised 2020 Media and Entertainment Industry Outlook, with a particular emphasis on the implications of the global coronavirus pandemic for media and entertainment businesses. Agenda and registration information is available on our conference website: https://www.mediafinancefocus.org/about-mff.

View the original article on TVNewsCheck.