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Articles by: "Rande Price, Research VP – DCN"

DCN-Research | Research

DCN research unveils the power of representation in audience engagement

In an era where media consumption shapes opinions and influences culture, the spotlight is on media businesses being more inclusive and diverse in their content and practices to better serve audiences. DCN’s new Digital Media Audience Diversity Study finds that content that strikes a chord with diverse audience segments leads to heightened audience engagement. Such content can cement a company’s position in a fiercely competitive landscape and facilitate monetization.

The study examines the attitudes, values, and behaviors of different generational segments and racial, ethnic, and identity (REI) cohorts in the context of digital media. To accomplish this, a survey was conducted among 1,500 respondents ― proportionally across Gen Z, Gen Y, and Gen X segments and each segment included Black, Latino, Asian, LGBTQ+, and White populations.

Representation matters

The findings uncover the perspectives and preferences of how respondents engage with digital media content, their subscription practices, their relationship to ad-supported content, and their views on representation and portrayal.

In this regard, the study underscores the importance of incorporating inclusivity, diverse representation, and authentic portrayal in media content.

  • Black respondents exhibit a heightened awareness of diverse creators and producers, actively seeking television content where they see themselves represented.
  • The LGBTQ+ community expresses a deep-seated sense of underrepresentation and the need for more authentic narratives in media. 
  • Asian audiences are eager to move beyond secondary roles in entertainment content and advocate for realistic and inclusive portrayals.
  • Black and LGBTQ+ audiences exhibit increased loyalty to media brands that respect their representation, sourcing content from creators who mirror their experiences and featuring talent that reflects their identity.

Impacts of mobile and social media usage

Generational nuances are exposed regarding the impact of mobile and social media usage on mental health. Gen Z and Gen Y are more attuned to the adverse effects of excessive social media and mobile use, particularly on self-esteem and anxiety. LGBTQ+ individuals, irrespective of their generation, also express heightened concerns over the negative implications of their digital engagements.

Willingness to pay for content

Diverse audiences exhibit varying tendencies toward paying for digital content. Gen Z and Gen Y are notably more willing to invest in digital content than Gen X, hinting at the shifting media consumption paradigms. Black and Latino cohorts emerge as more willing spenders on digital content than other REI groups.

Unlocking media benefits

The study reveals the appeal of on-demand access to content remains a consistent top benefit, across generational and Racial, Ethnic, and Identity (REI) cohorts.

  • The desire to watch what one wants when one wants is the foremost advantage of subscribing to video content.
  • Anywhere access emerges as the predominant advantage of subscribing to audio content.
  • Digital print media garners favor for its capacity to offer knowledge acquisition, personalized curation, consistent content updates, and unwavering quality.

DCN’s Digital Media Audience Diversity Study uncovers a spectrum of insights into the dynamics of digital media engagement. Understanding the subtleties within these findings across generation and Racial, Ethnic, and Identity (REI) cohorts is pivotal for content companies to engage with specific audiences effectively. Beyond profits, this engagement nurtures creativity, fosters inclusivity, and aligns media companies with the evolving ethos of a diverse and dynamic media future.

Full research report for DCN members only. Register to or login to download (on desktop see top right corner of page, on mobile the top center). Download buttons will appear at the top and bottom of the page.

Advertising | Industry-Research | Video

What neuroscience reveals about successful CTV ads

In the evolving advertising landscape, the shift from traditional linear television to digital platforms offers new ways for marketers to reach their audiences. However, while advertisers have new tools and techniques to target audiences, viewers are confronted with ads that disrupt their viewing experience, feel irrelevant, or annoy them. And new research uses neuroscience to demonstrate how context and tone affect advertising’s impact in CTV environments.  

Integral Ad Science (IAS) and Neuro-Insight’s new study, The Mind on the Stream, explores how advertisers can enhance the relevance of their CTV ads through tone and context. The research shows an increase of 14% in brand impact when the ads match the tone of the content viewed on CTV. Ads that match the context of the content experience show a significant boost in brand impact, +39%. Moreover, ads that match tone and context result in a greater significant increase of 49% in brand impact.

Matching advertising with content’s tone and context

The study includes a cohort of 137 participants in a controlled environment simulating an ad-supported streaming experience. All participants watch the same program content. During this simulated streaming experience, participants see 20 ads from 20 known brands across various verticals, including food/beverage, telecommunications, entertainment, finance, and consumer packaged goods (CPG). The ads vary in terms of length and narrative style.

The research tests the ads in two ways: tone/context and frequency.

Group 1 participants undergo tone and context variations, where some ads match the show’s context, some match its tone, and some match both tone and context.

  • Tone matches when advertisers ensure that their ads align with the overall feeling or voice of the content they accompany. In this study, since the program content is humorous, the research examines the impact of running ads that are also humorous.
  • Context matches when there’s a thematic or tangible connections between an ad and the program content. For instance, if the show features basketball, a contextually matched ad would also incorporate basketball elements.

Group 2 participants encounter different ad frequencies, with some ads appearing once, twice, three times, or four times during the program.

The study includes several metrics to measure the impact between Group 1 and Group 2 exposures.

  • Detailed memory measures ad memorability and brand impact by analyzing how well viewers retain specific details from the ads.
  • Emotional intensity gauges the emotional impact of the ads on viewers, with high scores indicating a strong emotional connection.
  • Global memory assesses how well viewers remember the visual, audio, and thematic elements.
  • Engagement measures the personal relevance of ad content to viewers.
  • Approach/Withdraw identifies the “lean in” or “I want to learn more” response from viewers, indicating likeability and overall positivity or negativity towards the ads.

Ad frequency

Interestingly, viewers overall show lower interest in ads repeated multiple times on CTV. However, ads that align with the video content mitigate the negative impact of repetition and perform better among viewers despite increased frequency. While brand impact remains consistent through the third viewing of a CTV ad, the fourth viewing results in a significant decline of 26%. This emphasizes the importance of limiting ad frequency to three viewings to preserve viewer connection and comprehension.

Advertisers and streaming publishers can optimize their ad strategies and drive better results when matching ad tone and context with the content viewed on CTV. The study also underscores the critical role of ad frequency in viewer engagement. By embracing contextual targeting, marketers and publishers have an opportunity to shift ad budgets and deliver impactful results in the digital advertising landscape.

Industry-Research | Video

FAST momentum drives the booming streaming market

The streaming revolution is reshaping content consumption at a rapid speed. comScore’s State of Streaming 2023 reveals a 21% surge in the number of hours households watch connected TV (CTV). This increase translates to an additional 2 billion hours in 2023 compared to the previous year. Total hours viewed grew from 9.6 billion to 11.5 billion from May 2022 to May 2023.

Ad-supported services, which claim the largest part of the newfound viewing audience, are driving this growth. The data underscores the shift towards digital streaming as millions of households’ primary content consumption mode.

The overall growth in streaming consumption is quite impressive. However, the most game-changing statistic highlighted in the report is that 75% of the newly acquired streaming hours are from providers beyond the top six streaming apps. This elite group includes Netflix, YouTube, Prime Video, Hulu, HBO Max (now Max), and Disney+ is witnessing an interesting transformation. As the consumption of FAST (Free Ad-Supported Television) and targeted programming intensifies, these traditional giants face competition from rising stars in the streaming realm. FAST’s expanding influence is reshaping the streaming landscape.

Key trends in the streaming market

comScore’s report explores and confirms trends in the streaming landscape, adoption, growth trajectories, and the ever-evolving range of services.

Digital video acceleration: Digital video consumption is accelerating, with 81% of households with WiFi engaging in streaming content.

Ad-supported streaming growth: CTV households streaming ad-supported content now reach an impressive 83.7 million, a 17% increase from 2021 to 2023. Non-ad-supported services also showcase growth, reaching 81.1 million, reflecting a 9% increase.

Targeted programming triumph: Targeted programming on FAST platforms is surging. Hispanic households lead the charge by consuming nearly twice as many hours of FAST content, showcasing an impressive 81% YoY increase. Linear streaming providers also found their place in the digital realm, securing three top spots in the Top 10 video services based on hours viewed per household.

Cord-cutting dominance: The cord-cutting trend is reaching a new milestone, with 60% of CTV households now being cordless. This substantial leap from the 37% recorded in May 2019 underlines the growing shift away from traditional TV subscriptions.

Smart TVs reign: Smart TVs are firmly establishing themselves as the preferred device for CTV streaming, with a robust 23% increase in total households streaming content via these devices since May 2021. Gaming consoles are also seeing a notable 18% increase in usage for streaming purposes.

Real-time market impact at play

Further, comScore’s report provides context in understanding how the evolving TV streaming marketplace impacts the current television revenue model. The current Charter-Disney dispute centers on pressure to change the existing television distribution paradigm. Charter is declining to accept Disney’s requested fees for its channels, citing the fact that Disney primarily reserves its premium content for its streaming platforms. Charter wants complimentary access and distribution flexibility, which directly impacts Disney’s direct-to-consumer revenue strategy. This dispute underscores the rapidly shifting dynamics of the entertainment industry.

The State of Streaming showcases the ongoing revolution of streaming in the entertainment landscape. With consumption growth, the ascent of ad-supported services, and the proliferation of emerging players, the report provides valuable insights to help reshape content monetization strategies.

Industry-Research | Video

Streaming consumers like episodic content on big screens

The streaming industry is experiencing rapid, continuous evolution including consumer behavior and preferences. NPAW’s, a global video analytics company, new report Video Streaming Industry Report H1 2023, tracks and analyzes video consumption, consumer behavior, and quality of experience. The research looks at streaming behavior in Asia, Europe, Latin American, North America, and the Pacific. The report shows that overall playtime for the streaming industry is growing steadily, with a 4% increase compared to the previous year. This offers a positive indicator of user engagement with platforms and their content.

Streaming playtime grows

Further, all regions except Asia report higher playtime per user and service. North America leads the way with a remarkable 41% year-over-year increase, followed by Latin America at 21%. These differences highlight the diverse streaming preferences that exist globally.

Examining the raw figures reveals the emergence of two distinct categories. Europe, North America, and the Pacific region constitute high-consumption zones, each averaging over 79 minutes of daily service usage per individual. In contrast, the second group, comprising Asia, Latin America, and the Middle East, experiences less usage, with a daily average of under 53 minutes. Notably, Asia records a mere 30 minutes.

Episodic content takes center stage

NPAW’s streaming data shows a clear preference for episodic content among users. Globally, episodes account for 60% of the total playtime, whereas movies capture 25%. This preference for episodic content remains consistent across regions, except in North America, where movies share a comparable share of playtime. Notably, the Middle East stands out as a region favoring episodic content, with movies and short content comprising less than 10% of the total playtime.

Smart TVs dominate the viewing landscape

The dominance of large screens, especially smart TVs, in VOD consumption, is expanding. In the first half of 2023, smart TVs contribute 51% of the total VOD playtime, highlighting viewers’ inclination towards the immersive experience provided by these bigger devices. This trend also plays a role in consolidating smaller-screen devices like smartphones, which are currently witnessing a decline in their share of playtime.

Parallel to VOD, larger screens continue to dominate linear TV consumption. TVs and set-top boxes collectively account for approximately 80% of the linear playtime, highlighting viewers’ preference for the traditional, in-home viewing experience.

Sports streaming takes off

One of the most remarkable trends in streaming is the rapid growth of sports streaming. Major sporting events in the first half of the year increased substantially in streaming adoption and engagement compared to the previous year. This surge in sports streaming highlights the changing nature of entertainment consumption as viewers increasingly turn to streaming platforms to catch their favorite sports action.

Streaming evolution

The streaming landscape continues to evolve in the first half of 2023. VOD consumption continues to grow, driven by user preference for episodic content and larger screens, particularly smart TVs. Improvements in visual and audio quality contribute to a more gratifying streaming journey across most geographical areas. Understanding user preferences and expectations remains pivotal in shaping the future of entertainment consumption. Be it indulging in episodic narratives via smart TVs or immersing in live sporting spectacles on expansive screens, streaming is a universal practice.

Advertising | Industry-Research | Video

Advertising popular with streamers and consumers

It is becoming increasingly clear that advertising will play a significant role in the streaming ecosystem. As Disney CEO Bob Iger told investors in Disney’s quarterly earnings call, “The advertising marketplace for streaming is picking up.It’s more healthy than the advertising marketplace for linear television. We believe in the future of advertising on our streaming platforms, both Disney+ and Hulu.”

Industry giants are now seamlessly incorporating ad-supported tiers into their streaming options. This shift from the early days of subscription-based, ad free streaming underscores the industry-wide recognition that catering to budget-conscious consumers is integral to achieving sustainable subscriber growth.

New research from HUB, TV Advertising: Fact or Fiction, affirms that most television viewers actively embrace ad-supported offerings. Six out of ten viewers prefer ad-supported subscriptions, especially when presented with the prospect of a reduced monthly fee. Interestingly, those with reservations about advertising remain in the minority, underscoring the widespread acceptance of ads as an primary and tolerable factor of content consumption.

Shifting the paradigm

The transformation in consumer sentiment towards ad-supported subscriptions carries a dual impact. Firstly, it renders ad-supported tiers significantly more appealing to a broader spectrum of viewers, including those who haven’t subscribed previously. Secondly, it reinforces the notion that the quality and diversity of content have a significant influence over viewer preferences. This often outweighs the appeal of a completely ad-free experience. Within the streaming ecosystem, advertising now emerges as a central thread weaving together content variety, affordability, and viewer gratification.

The rising desire for customization

Furthermore, a growing trend in viewer preferences is the desire for enhanced control over subscription tiers. Nearly four out of 10 viewers express a strong inclination towards personalizing their subscription model. They’re searching for a flexible array of choices, ranging from a premium, ad-free encounter to a more budget-friendly alternative featuring strategically placed advertisements. The attraction in customization preferences empowers streaming providers to cater to a broader spectrum of consumer segments.

Entrants that intrigue

Notable platforms like Max, Disney+, and Netflix, which recently embraced ad-supported tiers, are meeting positivity from their audiences. This dispels concerns about potentially hurting your brand in a previously ad-free service due to the introduction of advertisements. Twenty-seven percent of viewers switched tiers. Among them, 60% switched from with ad to no ad tiers, and 46% switched from no ads to with ad tiers.

Enhancing engagement through thoughtful execution

Ensuring a satisfactory viewing experience for consumers creates an environment ripe for advertisers to thrive. When viewers encounter an appropriate amount of advertising content, their engagement levels increase. This principle extends not only to the overall number of ads but also to the duration of ad breaks. Contrary to the notion that advertising detracts from the streaming experience, it possesses the potential to elevate it, capturing viewers’ undivided attention when executed thoughtfully.

The valuable component of ad-supported subscriptions

As viewing sources diversify, ad-supported subscriptions assume a key role within the streaming landscape. Subscribers want the autonomy to mold their subscription expenditure as well as the degree of advertising they’re willing to embrace. In response, streaming platforms offer a dual strategy, presenting ad-supported and ad-free tiers. This shift harmonizes content diversity, affordability, and engagement, shaping the streaming ecosystem.

Advertising | Industry-Research | Video

For SVOD success, launch with ads from the start

In the ever-changing landscape of streaming services, media companies constantly explore new strategies to attract and maintain subscribers. One notable approach is the success of the ad-support SVOD tier. In fact, new research from Ampere shows that streaming services launching with an ad-supported tier from the start have a higher proportion of subscribers than those that added it later.

Ampere’s data reveals that SVOD services like Hulu and Peacock, which were early adopters of ad-supported tiers, boast an impressive 90% of ad-supported viewers. On the other hand, latecomers like Netflix, Disney+, and HBO Max struggle to gain significant traction with their ad-supported options. These late starters capture only a small share of their subscriber base. For instance, as of June 2023, approximately 2% of Netflix and Disney+ US subscribers are on the ad-supported tier. Even HBO Max, which launched an ad tier in March 2021, had only 5% of its subscribers on its ad-supported plan before transitioning to Max in April.

Drivers of success

Ultimately, an ad-supported tier’s success depends on several factors, including the service’s pricing strategy, content library, and targeted audience. Launching with an ad-supported option from the start appears to be more effective in building a substantial base of viewers. Late adopters may find attracting a significant share of their subscribers to the ad-supported tier challenging. This is especially true if the service has a strong legacy of being ad-free.

Ad-free service is still appealing

Despite the apparent appeal of ad-supported viewing, most new subscribers across the top seven SVOD services still prefer ad-free plans. According to Antenna data, between January and May 2023, three out of five new subscribers opted for ad-free viewing. Even services that recently introduced ad-supported tiers, such as Peacock, saw a considerable percentage (69%) of new subscribers choosing ad-free options.

However, there are potential changes on the horizon. Netflix has made a strategic decision to remove its Basic plan, which previously served as a mid-range option between the ad-supported and standard ad-free plans. With the elimination of the Basic plan, the price gap between ad-supported and ad-free viewing has increased significantly from $3 to $8.50 monthly. This move might lead more new subscribers to opt for ad-supported viewing due to the cost difference.

Additionally, Netflix’s crackdown on password sharing during June and July 2023 could have also impacted its subscriber base. Free viewers who were previously enjoying content outside of the subscriber’s home are now more likely to sign up for their accounts. For these price-conscious users, the cheaper ad-supported tier could become an appealing option.

However, the trend of traditionally ad-free services attracting more ad-free subscribers might continue to prevail. Peacock’s decision to close the free ad-supported tier to new users. However, they still allow existing subscribers of the free ad-supported to continue using it. This suggests that companies are recognizing the importance of retaining ad-free subscribers.

Industry-Research

This survey can enhance people’s ability to detect misinformation

In today’s fast-paced digital age, there is an overwhelming amount of information, making it increasingly challenging to differentiate fact from fiction. Researchers recently developed a two-minute survey, Misinformation Susceptibility Test (MIST), to assess an individual’s ability to distinguish between real and fake news. By delving into the nuances of misinformation susceptibility within social psychology, particularly concerning social media, academics may be able to devise more potent intervention strategies. MIST offers a pivotal starting point for researchers to gain a profound comprehension of the underlying principles of social media products and their algorithms’ impact on the vulnerability to misinformation.

The MIST survey is comprised of 20 headlines, and participants must identify the fake headlines among them. The tool measures individuals’ ability to detect deceiving elements, such as manipulative language, in just two minutes. Interestingly, the research shows that younger Americans under 45 performed worse than older adults in distinguishing between real and fake news. Younger adults are more likely to suspect misinformation where there is none. They also tend to mistrust news headlines overall, possibly influenced by their higher online media consumption.

Further, mainstream news consumers, particularly those of AP news, perform better at distinguishing between real and fake headlines, with an average of 16 correct identifications. The study reveals that those who get their news from social media, especially Snapchat, could improve in distinguishing between real and fake headlines, as approximately 53% of Snapchat news consumers correctly identified just 10 or fewer headlines.

Enhancing news veracity acumen

MIST serves as an educational tool that provides individuals with an understanding of their susceptibility to misinformation and offers valuable insights into improving detection. The test’s feedback highlights specific areas where participants may be prone to errors in judgment. This empowers individuals to be more critical of the information they encounter and encourages them to adopt evidence-based approaches when evaluating news content.

The researchers plan to conduct further research on the correlation between “actively open-minded thinking” and resilience to misinformation. Specifically, they aim to explore methods of ranking content to enhance open-minded thinking.

Combating disinformation

In an era where misinformation can have profound societal consequences, MIST is a potent weapon against disinformation. By arming individuals with the tools to identify and combat fake news, tools like MIST can help create a more informed and discerning population. This, in turn, can lead to a decline in the viral spread of misinformation, ultimately contributing to a healthier information ecosystem.

MIST has significant implications for educational institutions and media literacy programs. By integrating this test into curricula, it can be used by educators to help students develop the necessary skills to critically navigate content online . Teaching students how to assess the credibility of sources, cross-check information, and challenge their biases will foster a generation better equipped to confront misinformation and make informed decisions.

MIST could significantly advance the ongoing battle against the widespread issue of misinformation. Embracing it as part of a strong academic approach could play a vital role in transforming media literacy education programs. The psychometric validation of the test ensures that it offers dependable and precise insights into an individual’s susceptibility to believing and disseminating fake news. Tools like the MIST in literacy programs empower individuals to learn more about discerning information and contribute to a more informed society. Ongoing efforts to refine and improve MIST, alongside other tools, and strategies, are vital in effectively addressing the challenges posed by the constant flow of deceptive information

Industry-Research | Research

Digital benefits entice new news subscribers

Advertising messaging is an important trigger in increasing people’s willingness to pay for online subscriptions. New academic research, Effects of Advertising Messages on Willingness to Pay for Online News, from Bartosz Wilczek, Ina Schulte-Uentrop, and Neil Thurman, evaluates effective advertising strategies for online subscriptions. The study focuses on four types of advertising appeals: digital-specific, social, normative, and price transparency. The findings indicate that digital-specific features appeal. Aspects like personalization, online-first delivery, and online-only offers significantly impact participants’ willingness to pay. This suggests that emphasizing the unique digital advantages of online news can increase sign ups and subscription interest.

Messaging impact

This research sets out to address two crucial questions. First, it seeks to uncover the most potent individual advertising message (digital-specific, social, normative, or price transparency appeal) to drive people’s willingness to pay for online news.

The study also looks to understand which combination of advertising messages among digital-specific, social, normative, and price transparency messaging ultimately boosts people’s willingness to pay for online news.

Messaging appeal

The different respondent testing shows that digital messaging is the most potent. Social messaging that emphasizes community membership and offline and online events also positively influences participants’ willingness to pay. This finding suggests that fostering a sense of belonging and engagement within a community can enhance subscription intentions.

Normative messaging, which focuses on the importance of supporting independent, inclusive, and watchdog journalism, has a moderate positive impact on willingness to pay.

Interestingly, the price transparency appeals, which provide information on the news industry’s critical financial situation, do not significantly impact willingness to pay. This suggests that while consumers may value transparency, it may not be a primary motivating factor for subscribing to online news.

Combining messages

The research reveals that combining advertising messages can increase people’s willingness to pay for online news. Combining the normative appeal with the price transparency appeal is the most convincing. In comparison, other combinations of advertising messages do not yield significant effects on people’s willingness to pay for online news.

What’s surprising is that neither the normative nor the price transparency appeal is sufficiently convincing on its own. However, combined, they effectively increase audiences’ willingness to pay for online news. Moreover, the findings suggest that adding a digital-specific or social appeal to a subscription pitch that includes both a normative and a price transparency appeal is ineffective. One explanation could be that the more appeals a subscription pitch contains, the longer and more complex it becomes—which might decrease its effectiveness. This suggests that the efficacy of a subscription pitch depends less on the quantity and more on the quality of arguments and how well they work together.

Digital news publishers can leverage these insights to tailor their advertising strategies and enhance subscription uptake. By highlighting the unique features of online news, fostering a sense of community, and emphasizing the societal importance of independent journalism, publishers can increase consumers’ willingness to pay for online news subscriptions. However, it is important to note that normative and price transparency appeals may have a limited impact on subscription intentions on their own, suggesting the need for a multi-faceted approach to advertising online news subscriptions.

Industry-Research | Video

What consumers value in streaming services

The streaming television landscape is increasingly competitive. Experimenting with the formula for success, many streaming services are introducing ad-supported tiers, while others are raising subscription fees and consolidating corporate offerings. Therefore, understanding consumer preferences regarding payment methods, perceived value, and preferred providers is crucial to meet audiences’ changing needs in an evolving environment.

Hub Research’s new report, Monetization of Video, delves into the evolving dynamics of the TV business from a consumer perspective. The study shows that nearly half (43%) of respondents reached their set limit of seven different TV services and said no more. Another 35% of respondents actively set a limit of seven TV subscriptions but have yet to reach that maximum number. Limiting the number of TV subscriptions indicates (seven appears to be the magic number) that consumers are becoming more selective about the services they choose, seeking quality over quantity.

Usage and subscription

The report also shows that 44% of respondents spend more time on TV than a year ago, indicating a growing investment in the medium. Approximately 40% of Tubi or Pluto users rated these free platforms as the highest value, suggesting their investment in FAST content and user experience is paying off.

Furthermore, the research highlights that value perception among consumers is similar between ad-free and ad-supported versions of platforms. This suggests that consumers are willing to accept advertising if it allows them to access content at a reduced cost or for free. Providers should consider offering ad-supported and ad-free options to cater to a broader range of consumer preferences.

The study also finds that a significant portion of viewers (42%) sign up for a new platform but cancel shortly after. This trend is particularly prevalent among Gen Z viewers and those with children. Moreover, the research indicates that the more paid TV subscriptions a consumer has, the more likely they are to subscribe to a new service and cancel it soon after.

Assessing consumer perspective

Importantly, the HUB analysis provides insights into the consumer perspective on the streaming market and factors that influence their perception of value. The research looks at the complexity of the television landscape. It identifies how friction points, FAST channels, and economic factors affect consumer decisions and value perceptions.

  • Friction points and erosion of perks: Traditionally taken-for-granted perks, such as password sharing and content exclusivity, are starting to erode, leading to a higher level of friction among consumers.
  • Rise of FASTs: Competition in the subscription video-on-demand (SVOD) space is intensifying with the emergence of Free Ad-Supported TV (FAST) services. Media companies and TV manufacturers are entering this arena, further diversifying the TV landscape.
  • Economic factors: Consumer concerns about inflation and the economy’s state are additional variables shaping TV consumption choices.

Hub’s research offers insight into consumers’ evolving preferences and dynamics within the streaming industry. As the landscape becomes increasingly complex, understanding consumer payment preferences, value perceptions, and the optimization of content monetization is crucial for content services. By adapting to these changing preferences and offering compelling features, services can improve consumer satisfaction and grow revenue in this evolving industry.

Industry-Research

Convincing young audiences of the value of news

Understanding the habits and motivations of non-subscribers is just as crucial as studying subscribers’ behaviors when building a successful subscription-based news product. A Norwegian study, The Burden of Subscribing: How Young People Experience Digital News Subscriptions, delves into the motivations and experiences of young adults, ages 26-30, who read news online but do not pay for it.

The study takes a qualitative approach and sheds light on three key motivations for not subscribing: content exclusivity, time constraints, and unappealing payment models. Further, the study identifies additional factors contributing to people’s reluctance to subscribe to news. These factors relate to socio-demographic variables, the perceived value of news, notions of free news, payment models, and different content.

Newsgathering habits for non-subscribers

Participants access digital news but employ various strategies to gather information from non-subscription news sources. These strategies include searching for alternative coverage, borrowing login credentials, or relying on friends and family. Young adults don’t inherently oppose the idea of paying for online news. However, they express concerns about being charged for certain types of content, particularly information of significant importance and general interest. They believe such content should be free to serve the public interest.

Attracting young adults 

Surprisingly, the style, format, or journalists did not influence young adults’ decision to pay for news. Instead, participants primarily focused on the content itself. They questioned whether the same information is free elsewhere, indicating a perception of a zero-reference price. Young adults were less concerned about a news provider’s unique perspective or comprehensive coverage and more focused on the availability of similar information from alternative sources. This finding highlights the need for news organizations to offer unique content not found elsewhere.

Another dimension that emerged from the analysis is how young adults perceive subscriptions in relation to time. Some participants expressed a sense of commitment to reading more thoroughly if they were to pay for a news service. However, a common trend across the sample was the perception that subscriptions were time-consuming, creating a potential barrier to their adoption.

Multiple subscription options

Interestingly, many young adults viewed subscriptions as an addition to their existing news consumption habits rather than a complete replacement. While this presents an opportunity for news organizations to attract paying subscribers, it also poses a challenge. Some participants described the experience of keeping up with multiple subscriptions as a draining chore, leading to feelings of information overload. This finding underscores the importance of considering the user experience and ensuring that subscriptions offer tangible benefits without becoming burdensome.

When considering the price of digital subscriptions, participants viewed it within the context of their overall news consumption habits. Young adults feel the value they derive from various news sources and weigh the cost of subscriptions against alternative options.

Payment options

Participants also express the need for novel subscription models to cater to their diverse media appetites. Young adults preferred micropayments and the ability to access individual articles rather than committing to full subscriptions. This approach resonated with their desire to personalize their news consumption experience. Others called for a “Spotify model” where they could select and choose content from different providers through a joint subscription.

Value proposition

This study highlights the importance of understanding non-subscriber habits and preferences to design subscription models that align with their needs. News organizations can create compelling value propositions for young adults by offering flexible payment options and exploring joint subscriptions and personalized news portfolios. By considering the overall media repertoires of young adults, news organizations can build stronger relationships and attract a loyal subscriber base.

Advertising | Industry-Research

Programmatic advertising has a quality problem

In the ever-evolving world of programmatic advertising, marketers’ quest for transparency and efficiency is paramount. The 2023 ANA Programmatic Media Supply Chain Transparency Study found that marketers have major concerns about the quality of programmatic buying. The report identifies that approximately 15% of programmatic spending and 21% of impressions appear on low-quality made-for-advertising (MFA) websites. And while marketers include 4,500 MFA sites on exclusion lists, few provide inclusion lists of quality sites for their advertising campaigns.

The study also reveals that the main problem centers on accessing and analyzing data log files. In fact, only half of the 67 initial participating advertisers (52%) owned direct DSP data access through their contracts. For the remaining advertisers (48%), their access to DSP data was mediated through their agency’s DSP contracts.

As background, 67 ANA member companies agreed to participate, but 46 encountered legal issues or could not access their log data from DSPs, SSPs, and Ad Verification providers, effectively barring their participation.

The research identifies additional issues and recommends a more transparent and efficient open web programmatic marketplace. It is based on log-level analyses across $123 million in spending with 21 advertisers and 35 billion impressions and supplemented with 35 qualitative interviews with supply chain intermediaries.

Recommendations

The report observes several operational challenges in programmatic practices. It also offers corrective steps to get more value from the programmatic ecosystem.

Information asymmetry and waste

The study identifies information asymmetry as a significant roadblock to achieving transparency in the programmatic supply chain. Advertisers often lack crucial information about the quality of media inventory sold in auctions, leading to overpayment, inefficient decision-making, and wasteful media investments.

To address this issue, advertisers must demand access to comprehensive and reliable information about the media inventory they purchase.

Data access challenges

Despite the growing interest in data-driven marketing, many companies struggle to access log data from demand-side platforms (DSPs), supply-side platforms (SSPs), and ad verification providers. This lack of data access creates transparency issues, inefficiency, and wastage.

Advertisers should establish direct data access contracts with primary supply chain partners to maximize transparency and gain control over their media campaigns.

Misaligned incentives

The study reveals that advertisers often prioritize cost over value in purchasing programmatic media. Chasing cheap cost-per-thousand-impressions (CPMs) may seem attractive initially, but it often leads to downstream issues in ad quality.

Advertisers must balance cost and quality to avoid wasteful investments and focus on the value their media buys deliver.

Website overabundance

The study shows that campaigns utilized an average of 44,000 top-level domains, raising concerns about fraud, viewability, and brand safety.

Advertisers should streamline the number of websites used while ensuring fairness for small or minority-owned service providers. By reducing the number of websites, advertisers can concentrate on high-quality inventory and mitigate the risks associated with excessive website usage.

Low-quality made-for-advertising websites

The study highlights that low-quality made-for-advertising (MFA) websites, which are created simply to generate ad revenue through sensational headlines and subpar content, accounted for 21% of impressions.

Advertisers must evaluate the suitability of MFA inventory for their brands and consider their tolerance for including such sites in their campaigns. Striking a balance between reach and brand safety is crucial.

Sustainability concerns

Programmatic advertising has a notable environmental impact due to its energy-intensive nature.

Advertisers can contribute to sustainability efforts by making more productive and non-wasteful media buys. Certain website types, especially MFA sites, generate higher carbon emissions. Advertisers should prioritize sustainability in their media buying strategies and opt for environmentally conscious platforms and vendors.

Importance of log-level data (LLD) analysis

The study emphasizes that improved data matching and analysis can significantly reduce the “unknown delta,” which refers to unattributable ad spend.

Leveraging log-level data allows advertisers to achieve a zero-percent delta, gaining valuable insights into their ad spend and performance. Analyzing log-level data empowers advertisers to make data-driven decisions and optimize their media investments effectively.

Manage the supply chain

The ANA report emphasizes the importance of properly managing the programmatic supply chain. This enables advertisers to make informed decisions based on transparency and data-driven insights. Further, it allows advertisers to analyze ad impressions’ impact on consumers and evaluate the financial transaction between the publisher and the overall value delivered to the target audience. This way, advertisers can optimize their campaigns and publishers can improve the ad placements and enhance the overall effectiveness of the advertising.

Effective advertising is not simply a question of reach. While programmatic advertising allows for efficiency and scale, marketers must manage the supply chain in order to make the most of their investment.

Industry-Research

U.S. media sees some promising signs, despite ongoing challenges

In an era where digital media, social platforms, and cutting-edge technology constantly redefine how we consume and interact with news, understanding the dynamics of the news ecosystem is crucial. Each year, Reuters Institute’s Digital News Report  aims to unravel these transformations, provide insights into future challenges and uncover opportunities for news organizations. Remarkably, this year’s report reveals a notable resurgence in news interest and trust within the United States, following a significant decline witnessed in the previous year.

News engagement and trust

According to the report’s U.S. survey, 73% of respondents report accessing news at least once per day, a 6-percentage point increase from the previous year. This rise in news consumption highlights a recovery from the “tuning out” phenomenon that followed the Trump presidency and the height of the COVID pandemic. Although news engagement remains below the peak levels observed during those periods, recent increases offer hope for a rebound.

Moreover, the survey reveals that interest in the news is recovering somewhat, while trust in the news is also experiencing a significant rebound of 6 percentage points following last year’s lows. These findings indicate a positive shift in public sentiment toward news organizations and their credibility.

Local and national news challenges

Despite the signs of increased news engagement and trust, the news industry continues to grapple with economic turmoil. Gannett, the largest newspaper chain in the states, announced a 6% reduction in its U.S. media division, resulting in approximately 200 job cuts. This move follows previous layoffs of 400 employees at Gannett publications. The local news sector is most affected by the closure of over 360 newspapers between late 2019 and May 2022, predominantly weekly newspapers serving small to mid-size communities.

Recognizing the importance of local news, efforts to preserve it are proliferating. These initiatives include the adoption of non-profit and diversified commercial business models, the establishment of start-up labs, and the availability of local and national funding opportunities. There is also a trend towards returning to local ownership, as communities recognize the value of having a reliable and independent local news source.

The news industry’s difficulties extend beyond the local level, with major national media organizations also experiencing difficulties (and the media industry as a whole suffering from record level reductions). CNN announced layoffs affecting hundreds of employees, including discontinuing live programming on HLN, its sister channel. National Public Radio (NPR) cut 10% of its staff and stopped production on four popular podcasts due to a $30 million budget deficit. Vox Media laid off 7% of its workforce, and BuzzFeed closed its entire news division, citing a lack of support from major platforms.

Subscription growth

On a more positive note, the U.S., the subscription landscape for news consumption is thriving, with around 56% of subscribers opting for two or more subscriptions. Additionally, the popularity of platform-based news subscription products, including Apple News+, with 18% of U.S. subscribers, is also rising. Interestingly, this trend of multiple subscriptions is not limited to the U.S. Australia, Spain, and France are also witnessing a surge in second subscriptions.

Within the U.S., 8% of subscribers are willing to pay for newsletters written by individual journalists or influencers, while 5% opt for podcasts or YouTube channel subscriptions. This trend of paying for content from independent creators is still predominantly within the U.S. market. The willingness to invest in personalized newsletters and content from individual creators suggests a growing demand for alternative news sources and a desire for unique perspectives. Although currently more prevalent in the U.S., this trend could expand to other markets as news consumers seek specialized and personalized content.

Social media shifts

The report finds declining engagement with Facebook and the rise of TikTok and a range of other video-led networks. Younger audiences show a weaker connection with news brands’ own websites and apps than previous cohorts – preferring to access news via side-door routes such as social media, search, or mobile aggregators.

Social media as a news access point continues to raise concerns about the potential impact on the diversity and quality of news. With algorithms often prioritizing engagement and clickbait-style content, there is a need for critical evaluation of the information consumed through social media platforms. News and media literacy education remain crucial in equipping individuals to discern credible news sources and navigate their social media-driven news consumption.

A.I. impacts journalism

Debates persist among journalists and researchers regarding the challenges and opportunities posed by A.I. in journalism. Some news outlets, such as BuzzFeed, are using A.I. to create travel guides and quizzes, while Bloomberg has launched its own GPT (Generative Pre-trained Transformer) tool. Nevertheless, many journalists and newsrooms still have concerns about generative A.I.

Amidst a challenging landscape, the Digital News Report 2023 offers encouraging findings of news interest and trust making a comeback in the U.S. Despite economic difficulties and workforce reductions, there are also positive signs, such as a rise in subscriptions and newsletters, which highlight the growth of sustainable paths in journalism.

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