From business model shifts to consumer behavior, the pandemic has accelerated changes in the media business. Many of these shifts were already underway, of course. And it is likely many of these changes are likely here to stay. A new report from Roku confirms that streaming media consumption and binge watching are up. However, while traditional television also experienced a lift during the early months of lockdown, Roku sees an uptick in the trend towards cord cutting and cord shaving.
Roku’s annual study found that approximately 32% of U.S. households don’t have a traditional pay TV subscription. Another 25% of households, which Roku identifies as Cord Shavers, have cut back their service. Amidst the Covid-19 pandemic, financial woes and concerns about the economy are driving further interest in cord-cutting and cord shaving. Roku reports that 45% of these Cord Shaver households stated they are likely to cut the cord fully in the next six months.
Roku’s 2020 annual Cord-Cutting Study found that:
TV audiences are watching more ad-supported content and flocking to extended free trials of subscription services.
About half of all TV households surveyed said they are streaming more free-TV during the Covid-19 pandemic than they did before.
Binge watching is on the rise in 2020. More Americans say that they regularly stream many episodes back to back in one sitting.
Americans say reducing home entertainment expenses is the number one reason for cutting the cord.
Despite 28% saying that the loss of live sports prompted them to cut the cord, the majority of Cord Cutter households say that the return of live sports won’t entice them back to traditional pay TV.
Streaming is even more appealing now. Consumers cite convenience, a growing selection of content – including free, ad supported options – and on-demand access as reasons to cut the cord. Around 40% of recent Cord Cutter households shared that free TV or extended free trials to a streaming channel helped convince them to cut the cord. And more households than ever are watching free, ad-supported movies and TV shows. Roku’s research shows that Cord Cutting is accelerating is the U.S., and at a greater pace in 2020 than in previous years – a trend that is not likely to slow even as the economic impacts of the pandemic eventually diminish.
A new report from WARC predicts that the value of global advertising trade will decline by 8.1% – or $49.6bn – this year, to a total of $562.9bn. This comes only months after a pre-outbreak forecast of 7.1% growth, which it made in late January. As such, the absolute downgrade equates to $96.4bn. WARC’s latest Global Ad Trends report focuses on the impact of COVID-19 on global ad investment. It summarizes the latest ad spend projections by market, media and product vertical from WARC Data, and provides insights and commentary from industry experts.
Ad budgets have seen the sharpest cuts in 8 years.
1. This year’s downturn will be softer than in 2009, when the ad market fell by 12.7% ($60.5bn). This is for a number of reasons, including the U.S. presidential elections, stronger-than expected first quarter results, and a more established online sector – particularly within e-commerce.
2. Almost all product sectors will record a decline in ad investment this year. The most severe falls will be recorded among travel & tourism (-31.2%), leisure & entertainment (-28.7%), financial services (-18.2%), retail (-15.2%) and automotive (-11.4%).
3. Traditional media will fare far worse than online. Investment is set to fall by 16.3% – $51.4bn – this year, with declines recorded across cinema (-31.6%), OOH (-21.7%), print (-20.1%), radio (-16.2%) and TV (-13.8%).
4. Internet advertising is set to record mild growth this year (+0.6%) at a global level. However, a number of key markets will witness a fall. Social media (+9.8%), online video (+5.0%) and search (+0.9%) are all still expected to grow, though online classified – particularly recruitment – is set to fall (-10.3%).
5. A recovery is forecast for 2021, at +4.9%. This will still leave the value of global ad trade $21.9bn lower than its 2019 peak. Ad investment would need to rise 3.7% in 2022 to fully complete the recovery
WARC notes that any brands are currently assessing what the world will look like as lockdowns are lifted and consumers tentatively return to a “new normal.” They predict that, while advertising will recover from this shock (with global growth of 4.9% next year), it is certain that we will feel the economic impact of Covid-19 on the global economy for a generation.
