BROADCASTING - MORE VIEWERS, LESS REVENUE
Advertising revenues, unsurprisingly, are bearing the brunt of the current Covid-induced economic slowdown as marketing budgets are slashed. Advertising revenues at some TV channels have decreased by some 50-70%. Yet, the same broadcasters are caught in a catch-22 as they deal with an income shortfall while being expected to offer high quality programming to an audience more tuned in than ever. In France, for instance, one news channel recorded a historic high of audience share in March – attracting almost twice the number of its usual viewers.
Covid-19 adds to the challenges that broadcasters have faced in recent years - cuts to advertising and ferocious competition. They will now have to make up the financial shortfall during the rest of the year, but their ability to do so will depend on wider attitudes and appetites to invest once the initial pandemic stage is over.
In the meantime, online media – streamed at home and on demand – is winning from the crisis. Providers such as Netflix and Amazon have received an influx of new and returning customers. Outages were reported in late March in Europe and the US as millions of Netflix subscribers signed up and signed in. Disney+ has also launched during the pandemic in territories including the UK and France and will be a natural choice for parents and children keen to be distracted from current events.
MUSIC STREAMING IS DOWN
Music streaming platforms, however, are so far losers out of Covid-19. Music streaming is largely for individual listeners and the daily commute, while confinement is more often collective and journeys to work have disappeared. Quartz reveals that listening volume dropped by 23% in Italy and by 13% in the US and Spain between 3-17 March. The decrease in listeners combined with cuts to marketing budgets means streaming platforms will have a less lucrative 2020 than expected.
The global book industry has suffered from having to close stores and cancel events. Most publishing houses initially planned to postpone upcoming releases, but now that the pandemic has endured longer than originally thought, some releases will happen in May and June.
Despite the downturn for traditional booksellers, ebook sales are booming: some platforms have reported a 75-200% increase in activity. At the beginning of the crisis, downloads surged for schoolbooks in order to ensure education continued. An increase in literature downloads followed a few days later, and many readers are discovering ebooks for the first times. Covid-19 could therefore permanently change the book industry as more readers than ever get used to seeing their books on screen rather than paper.
NEW BUSINESS MODELS FOR CHANGING CUSTOMER TASTES
Book publishers as well as other content providers are giving new users free access, calculating that they will stick with them - and start paying – once the crisis is over. By rethinking the marketing of their offer, media companies can showcase their content for free and entice people to become paid customers. Platforms dependent on advertisers will have to play a more difficult waiting game and potentially seek ways to borrow and refinance from banks, stakeholders and others.
The hard reality is many media organisations will lose money – or at least make less money than they forecast – in 2020. However, the long-term picture could include a fundamental reshaping of consumer habits, as people try new streaming services and read their first ebook. Customers may also find their way back to traditional news channels after rejecting online current affairs platforms, some of which are prone to fake news mishaps. Everyday habits shape the media sector and as those habits change, organisations would do well to modify their offer to meet new tastes.
Over the past decade, the media sector has proven to be resilient. As new players entered the game, established ones modified their product to keep up with customers keen for on-demand and personalised content. Those who could not do so faded away. While Covid-19 creates a new kind of disruption, media organisations – and the teams that lead them – have experience in finding new routes to market and demonstrated ingenuity in keeping people from changing the channel. The sector, as a result, could learn from its recent history to shore up its future.