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

What consumers value in streaming services

July 18, 2023 Rande Price, Research VP – DCN

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

July 5, 2023 Rande Price, Research VP – DCN

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

June 27, 2023 Rande Price, Research VP – DCN

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

June 15, 2023 Rande Price, Research VP – DCN

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.

Industry-Research | Video

Publishers focused on audience, automation and video

June 13, 2023 Rande Price, Research VP – DCN

In today’s fast-paced digital world, media companies face intense competition across many different platforms. Echobox, a provider of social media management tools, offers new research, “Publishing Trends 2023,” highlighting media businesses’ priorities, challenges, and opportunities. The top three priorities for content companies include finding new audiences (53%), automation and AI (50%), and video content (47%). Staying ahead of the Facebook algorithm (53%), declining traffic (47%), growing digital subscriptions and diversifying revenue streams (both 34%) were commonly cited challenges.

Echobox surveyed a targeted sample of 32 leading media companies across the world. This global perspective includes respondents from 20 countries in Europe (67%), the Americas (20%), and Asia (13%).

Platform usage

Instagram emerges as a vital channel for publishers in 2023. In fact, the study shows that 66% of respondents believe Instagram will play a more significant role in their business this year. Publishers recognize the value of leveraging Instagram’s visual nature for content promotion and audience interaction.

TikTok is also gaining prominence, with 59% of publishers turning to this platform for video content distribution and audience engagement.

Media brands recognize the importance of capitalizing on the visual nature of TikTok and YouTube. By investing in video production and distribution, the report suggests that media companies can enhance their content offerings and attract a wider audience.

However, challenges persist on platforms like Facebook, primarily due to its lack of algorithmic transparency. Approximately one-third of media companies view Facebook as vital, and they want to maintain visibility and reach on this platform. Unfortunately, the opaque evolving nature of the platform requires publishers to constantly adapt their strategies, remain vigilant of algorithm changes, and seek alternative avenues to engage their target audience.

Embracing newsletters

Newsletters remain an area of growth for many media businesses. The report highlights that 56% of respondents plan to expand their newsletter offerings or start producing newsletters in the coming year. Publishers understand the value of direct communication and engaging subscribers in off-platform vehicles. By crafting compelling and personalized content in newsletters, media businesses can establish stronger connections with their audience and help drive traffic to their websites.

AI attraction

The report indicates that 63% of media companies acknowledge the growing importance of AI for their businesses. AI-powered tools and technologies offer immense potential to streamline operations, optimize content distribution, and enhance audience targeting.

Publishers can leverage AI to automate repetitive tasks, personalize content recommendations, and gain valuable insights into audience preferences. Media companies using AI can unlock new efficiencies, improve engagement, and achieve better business outcomes.

Ending third-party cookies

When thinking of the impending demise of third-party cookies in 2024, less than half of the respondents foresee a significant impact on their business. Specifically, 31% do not anticipate any effect and 13% state that they don’t rely on third-party cookies. Of the 50% of publishers anticipating significant impacts, half report they are prepared while the other half are not.

The Echobox report does highlight that, though the growth of newsletters has slowed, the first party data insights they provide does provide a means to offset the loss of third-party cookies.

Future focus

The results of Echobox’s 2023 publisher survey does show a certain amount of continuity from last year, as traffic remains a concern along with Facebook, while newsletters continue to demonstrate value. This year did see significant economic impacts as well as uncertainty around the role Twitter will play for media companies and advertisers. The report finds that publishers are investing resources in a wider array of social platforms in an effort to diversify their own audience demographics and to position themselves for increased adaptability to weather the evolving social landscape and consumer consumption trends.

Industry-Research | Video

Understanding consumer choices in the evolving TV market

May 26, 2023 Rande Price, Research VP – DCN

Consumers grapple with an overwhelming array of choices and confusion in an era of rapidly evolving streaming services. The streaming landscape has recently witnessed significant shifts, with established players like Netflix and Disney+ introducing ad-supported tiers, Peacock discontinuing its free tier, and anticipation around the impact of Netflix’s crackdown on password sharing.

In this context, HUB’s Best Bundle study aims to shed light on how consumers adapt to the evolving TV/streaming space and land upon the the ideal combination of services that suit their viewing needs. It delves into the extent to which viewers opt for linear versus on-demand services, ad-supported versus ad-free experiences, and subscription-based versus free streaming services. By examining these variables, the study aims to decipher consumers’ choices when constructing their personalized bundles.

The research shows a notable decline in the average number of TV sources used by respondents from 7.4 in 2022 to 6.4 in 2023. This decline suggests that consumers are consolidating their streaming services and opting for a more streamlined approach to their TV viewing experience. While the average of TV sources declined, the overall demand for streaming services remains robust.

Though the use of streaming remained the same compared to last year, responses with an MVPD bundle dropped to 55% versus 62% in 2022. Consumers continue to embrace streaming as their primary source of entertainment, and the decline in the number of sources used does not imply a decrease in consumption. Instead, it signifies a more focused and curated approach to streaming, where viewers prioritize quality over quantity.

Evolving landscape

Interestingly the largest segment of viewers (63%) continues to be those who utilize a combination of traditional and streaming TV sources. This remains consistent with last year (64%) and indicates that traditional TV sources remain relevant in the face of the streaming revolution.

The study reveals that 27% of viewers plan to add a subscription to their existing lineup, which is higher than the figure in 2021 (21%). While this shows a continued consumer interest in expanding streaming options, it also suggests a slight decrease from the previous year, as 33% of viewers intended to add a subscription in 2022.

Furthermore, more than half of respondents (57%) state that they have utilized at least one free-with-ads (FAST) TV service, which aligns with 2022 findings. This suggests that despite the proliferation of subscription-based services, free platforms with advertising support continue to attract many viewers. Cost-saving advantages of free services are attractive, and advertisements for access to content are tolerable.

The study also highlights a decline in the percentage of viewers who use three or more of the largest subscription video-on-demand (SVOD) platforms. In 2023, only 43% of viewers report using three or more of these SVOD services, compared to 50% in the previous year.

Hub’s Best Bundle research points to a nuanced streaming landscape, with viewers seeking a balance between traditional TV sources and streaming platforms. While streaming services are immensely popular, traditional TV sources still play a significant role in viewers’ entertainment consumption. The addition of new subscriptions indicates that viewers are willing to explore and invest in streaming services, although the growth rate has slowed slightly compared to previous years. Further, as the streaming landscape continues to evolve, service providers must take note of viewers’ shifting preferences. Streaming platforms can attract and retain viewers in an increasingly competitive market by offering diverse content, personalized recommendations, and competitive pricing.

DCN-Research | Revenue | Video

New DCN consumer research: Digital Media Subscription Tracking

May 23, 2023 Rande Price, Research VP – DCN

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.

DCN Members can access the video of today’s virtual event – a review of the study’s topline findings here.

Digital media companies recognize the important role of subscription-based models in monetizing content effectively. Understanding consumer behavior to support this business model is crucial for attracting and retaining subscribers, optimizing user experiences, and staying competitive. DCN’s new consumer subscription study: Digital Media Subscription Tracking offers a deep dive into consumer subscription behavior and covers a wide range of digital subscription services, including SVOD, MVPD, vMVPD, digital newspapers, magazines, and audio – and usage metrics for AVOD and FAST services. The report is DCN members only, please login or register to access (on desktop see top right corner, on mobile the top center).

The Q1 2023 report is available to all DCN members; all subsequent waves will be exclusive to DCN Benchmark participants as part of their Benchmark’s suite of reports offering timely market intelligence each quarter.

This quarterly research, conducted with Screen Engine/ASI, will identify trends and track market penetration, shifts, and growth in the rapidly changing media landscape. The first wave, Q1 2023, surveyed 1,893 adults 18+, representing the U.S. Census population by age, gender, race, and ethnicity. The sample was online-only and represented approximately 89% of U.S. households and adults 18+ with access to the Internet.

Category penetration

One of the study’s key findings is that the U.S. had more than one billion paid subscriptions in Q1 2023 across the digital media landscape – SVOD, MVPD, vMVPD, digital newspapers, magazines, and audio. This indicates that almost all online U.S. households (97%) subscribe to one or more digital media subscription services. On average, households subscribe to approximately nine different pay services when combining all seven digital media services measured in this study.

The SVOD service category has the most subscribers, with nearly a 60% share of total pay subscriptions, followed by MVPDs and vMVPDs, digital newspapers, digital magazines, and digital audio services. The study also indicates that 29% of all subscribers plan to add one or more services next quarter, while 26% plan to cancel one or more, with MVPDs potentially continuing to decline and vMVPD subscriptions potentially increasing.

The study also highlights that free, “ad-only” AVOD and FAST services will continue attracting more traditional media consumers, who tend to be older and watch more linear TV. SVOD with ads and AVOD services will provide a much-needed incremental and growing revenue stream, especially as growth for pay-only services that don’t carry ads slow their subscriber penetration.

Demographic appeal

The demographic profile of digital media service subscribers shows that the heaviest concentration of subscribers for all services combined are slightly younger (P18-34), more male (M18-34), more diverse (Hispanic and African American), family-oriented (parents with children under 18), higher income (households with income $150K+) and slightly more educated. This demographic profile is extremely attractive for advertisers, making the launch of more digital “hybrid” (pay + ads) services likely.

The Digital Media Subscription Tracking study offers digital content companies essential consumer research to support new revenue models and pricing strategies to stay competitive and retain their subscribers.

Please reach out to me at [email protected] with questions about the Digital Media Subscription Tracking study.

DCN Members can also access an on-demand video of the study results.

Advertising | Research | Video

Streaming continues to overtake TV

May 16, 2023 Rande Price, Research VP – DCN

In recent years, the traditional television and streaming video industries have undergone significant transformation due to the expansion of digital platforms and changing consumer preferences. To gain insights into these changes, Adtaxi conducted an extensive study, 2023 TV & Video Streaming Survey, exploring the evolving landscape of TV and video streaming with more than 1,000 U.S. adults.

According to the survey, streaming services have solidified their position as the primary mode of video consumption for most viewers. More than 80% of respondents report subscribing to at least one streaming platform, with Netflix leading the pack. The convenience of on-demand content, the wide variety of choices, and the absence of advertisements were cited as the primary reasons for the popularity of streaming services.

Preferred choice

Streaming services are the preferred choice of video consumption for a significant portion of adults, surpassing cable (31%) and broadcast (11%) options. Approximately 42% of adults now opt for streaming services, with 35% accessing streaming content through their TV sets and 7% using personal devices. Roku predicts that this trend will persist and that an estimated 50% of all U.S. households will cut the cord by 2024.

Cord-cutting continues

The research also reveals that the cord-cutting trend shows no signs of abating. A staggering 75% of respondents report that they canceled their traditional cable or satellite TV subscriptions in favor of streaming services. The flexibility, cost-effectiveness, and customizable nature of streaming platforms have made them attractive alternatives to traditional TV providers.

Original content and exclusive deals

In the battle for viewership dominance, original content has emerged as a key differentiator among streaming services. The Adtaxi survey found that 68% of respondents subscribed to a streaming platform specifically for its original programming. Netflix, Amazon Prime Video, and Disney+ were identified as the top platforms known for their high-quality original shows and movies.

Moreover, exclusive deals and partnerships have become important strategies for streaming services to attract subscribers. This includes securing exclusive rights to popular sports events, partnering with renowned creators, and signing contracts with top-tier production companies. These tactics not only help streaming platforms stand out but also provide viewers with unique and diverse content options.

The battle of ad-supported streaming

While subscription-based streaming services dominate the market, the survey highlights the growing popularity of ad-supported streaming platforms. Almost 40% of respondents report using ad-supported services, indicating a willingness to endure ads in exchange for free or lower-cost access to content. This trend should encourage more advertisers to invest in digital advertising within the streaming space, presenting new opportunities for brands to reach their target audiences.

The 2023 TV & Video Streaming Survey sheds light on the ever-evolving landscape of entertainment consumption. The dominance of streaming services, the ongoing cord-cutting trend, the importance of original content, and the rise of ad-supported platforms all point toward a significant shift in viewer preferences and behavior. As the industry continues to evolve, it will be interesting to see how streaming services adapt to meet the demands of their subscribers while providing a seamless and personalized entertainment experience. The future of TV and video streaming looks promising, offering consumers a wide range of choices and content options that cater to the consumer’s interests and preferences.

Industry-Research | Revenue

Tips and tactics for the growth of digital native media

May 9, 2023 Rande Price, Research VP – DCN

Digital media continues to transform the way people consume news and information. Native digital news organizations have become a vital source of information for many people around the world. With fierce competition and the role of social platforms as intermediaries, how can digital native media businesses grow, develop, and publish information with greater independence and sustainability? New research, Project Oasis, from Sembra Media, examines the trends, impact, and sustainability of independent digitally-native news organizations.

To help support the growth and sustainability of independent digital native news organizations, the report includes a searchable media directory. This database includes 530 digital native news organizations in more than 40 countries across Europe. It contains information on the types of stories each organization covers, their funding sources, and their audience reach ‒ showcasing the need for diverse voices and perspectives.

The directory is a valuable resource for journalists, editors, and publishers looking to connect with other independent digital native news organizations. It provides a way to easily find and share important stories and sources that offer diverse perspectives, which are essential to accurately informing audiences.

Challenges

Project Oasis highlights some of the many challenges facing native digital news organizations. One of the biggest is the struggle to achieve financial sustainability. Many of these organizations rely heavily on one or two funding sources, such as donations, subscriptions, and advertising. However, the report found that these sources of funding can be unpredictable and unstable, which can makes it difficult for organizations to plan their future. The research identifies the need for two to six revenue sources as optimal for native digital news organizations to be sustainable and remain independent.

Another challenge facing independent digital native news organizations is the need to build trust with their audience. Many people are skeptical of the news they see on social media and other online platforms. As a result, there is a greater need for independent digital native news organizations to establish their credibility and build trust with their audience.

Optimism

Despite these and other challenges, the report finds reasons to be optimistic about the future of independent digital native news organizations in Europe. These include several key trends that are shaping the future of the industry, including the growing importance of mobile and social media, the rise of video journalism, and the increasing use of data and analytics to inform reporting.

The research also focuses on identifying profitable business models for independent digital native news organizations. These models include advertising, subscriptions, memberships, events, grants, and partnerships.

An advertising-based model is the most traditional revenue source for digital news organizations. Competition from big tech platforms like Google and Facebook presents a difficult ad sales marketplace for smaller players. However, advertising is still a viable revenue source for digital news organizations. Digital news organizations should differentiate themselves by focusing on building high-quality content, engaging audiences, and offering first-party targeted advertising solutions to advertisers.
Subscription models require high-quality content that engages the reader and convinces them to pay for the content. There are also membership models, which offer a more community-focused approach to revenue generation. Memberships typically offer readers access to exclusive content, events, and other perks, in exchange for a regular fee. The report notes that membership models can be particularly effective for organizations with a strong and loyal following.
Events-based revenue models involve hosting conferences and workshops to generate revenue. The report notes that events can be an effective way to build relationships with readers and generate revenue. However, they require significant resources to organize and execute successfully.
Grants and philanthropy in funding independent digital news organizations are also available. The report notes that grants and philanthropic funding can be an effective way to support journalism that is not commercially viable. Organizations must carefully maintain their editorial independence and avoid conflicts of interest. The report also notes that there may be viable partnerships and collaborations between digital news organizations and other media outlets, as well as non-media organizations. Partnerships can offer benefits such as shared resources and expertise, as well as access to new audiences and revenue streams.

Future focus

As the digital marketplace continues to evolve, independent digital native news organizations will play an important role in shaping the future of journalism, filling news gaps, covering underserved communities, and combating mistrust and disengagement.

The Project Oasis report and its searchable media directory offer important resources to support the future of independent digital native news organizations. The research provides a comprehensive look at the challenges and identifies opportunities for sustainable growth. The directory also provides a valuable resource to help protect democracy by sharing resources, collaborating on projects, and amplifying each other’s voices.

Diversity, Equity & Inclusion | Industry-Research

Steps to help rebuild trust in news in underserved communities

May 2, 2023 Rande Price, Research VP – DCN

Consumer trust in news is a complex and dynamic relationship that varies across countries, platforms, and audiences. Different audiences have different reasons to trust or distrust news organizations. However, misrepresentation and underrepresentation are two common drivers of distrust in news reporting.

Reuters Institute’s new report, News for the Powerful and Privileged: How Misrepresentation and Underrepresentation of Disadvantaged Communities Undermine Their Trust in News, examines this problem. The report is part of the Trust in News Project, which explores the factors that drives trust for audiences in different contexts. The research identifies evidence-based recommendations for publishers and platforms. Reuters conducted 41 focus groups among 322 participants from Brazil, India, the UK, and the U.S. from several marginalized groups.

The respondents include:

Black and mixed-race audiences (people who identified as either preto or pardo) in Brazil
Marginalized castes or tribes and Muslim audiences in India
Working-class audiences in the U.K.
Black and rural audiences in the U.S.

The findings show that many respondents have doubts about the motives of news organizations. Many attribute their distrust to what they see as chronic bias in reporting: coverage that reinforces stereotypes and sensationalized news items.

Detailed findings

Respondents feel that the news media does not reflect their realities or interests but serves the agendas of those in power. The research finds that most participants see the news media as biased and depressing. They feel the news media often treats them unfairly, perpetuates stereotypes, fails to cover them, or promotes divisiveness among groups.

Respondents have different expectations and requirements from news media depending on their backgrounds and experiences. They cite examples of the news media’s misrepresentation in story selection and story framing.

– Emphasizing negative news

– Unfairly treating groups

– Perpetuating stereotypes

– Failing to cover them altogether

– Promoting divisiveness between groups

As one respondent states, “Black and brown people are not just the focus of tragedies; there are successful people among us.”

Many Black participants in the U.S. and Brazil note that most news coverage about Black people only emphasizes negative dimensions such as poverty, crimes, and violence. Further, respondents state that news coverage about high-profile cases of police brutality adds to the complexities and experiences of racism and discrimination in their day-to-day lives. One respondent comments:

“We always knew this was happening throughout history to the lynchings and the Civil Rights era. These things were always known, but seeing it broadcast every day, week after week, month after month, year after year, it’s mentally and emotionally exhausting, and I just couldn’t keep up with it.”

Action items

Research participants want news coverage inclusive of more positive and constructive news stories. They request that news stories be diverse and offer representation, transparency, and accountability. They would also like coverage to offer personal and social relevance.

The report suggests that the news media must address these concerns to rebuild trust and engagement with disadvantaged communities. Recommendations for news media professionals:

Invest in more diverse and inclusive newsrooms and sources
Provide more contextual and explanatory journalism
Avoid sensationalism and negativity bias
Seek feedback and dialogue with audiences
Collaborate with community media and civil society organizations

Reuters Institute acknowledges the challenges and trade-offs the news media faces in serving different public segments. It argues that there is no single trust problem or solution but rather a need for more nuanced and tailored approaches that recognize the diversity and complexity of audiences.

Advertising | Research

Is behavioral advertising good for consumers?

April 26, 2023 Rande Price, Research VP – DCN

Most of today’s digital display advertising is sold programmatically. The process is automated from buying to displaying ads and determining which ads are shown to which users. Programmatic advertising uses behavioral ad targeting and relies on extensive online consumer tracking, which raises important privacy concerns.

The benefits are often the counterargument to privacy – asserting the strong economic value consumers derive from targeted ads. But is this really the case for consumers? Do the purported positives – such as oft-touted “better effectiveness” and “ad relevance” – outweigh or offset the impact on consumer welfare? Further, how is the product’s quality viewed in targeted ads compared to other vendors, and how do the prices compare?

New research, Behavioral advertising, and consumer welfare: An empirical investigation from Eduardo Abraham Schnadower Mustri, Idris Adjerid, and Alessandro Acquisti, answers these questions. The findings show little consumer benefit in seeing targeted ads. In fact, respondents are less aware of vendors displayed and perceive products of lower quality, and at a higher price.

Study details

The research encompasses two studies. Study 1 included 489 participants across two phases. Phase One asked participants to browse randomly across selected websites using a Chrome browser on their computers. If they clicked on an ad, URL of the ad was captured. The research team then used automated scripts and the Google search engine to find competitive products of the advertised brands. They collected several pieces of information for the competitive analysis; landing pages, the product image, price, description, brand, and name of the website that sells the product.

Approximately one week later, respondents return for Phase 2. The researchers show nine product photos randomly to participants.

Respondents assessed all nine products:

three products from the ads they viewed (ad condition),
three competitive products from the organic search results (search condition), and
three randomly selected products from ads served to other participants in the study (random condition).

Study 1 included objective metrics in the analysis, like price. The study also included self-reported metrics such as participants’ assessments of purchase intention, product quality, price fairness, relevance, and novelty of product type, brand, and vendor. This design captured participants’ perceptions and purchase intentions independent of their vendors’ perceptions.

The second study replicates the first. However, it includes third-party objective data vendor rankings from the Better Business Bureau and SiteJabber. The researchers share the vendor ratings with the respondents before asking about their purchase intent.

Findings

The research shows that participants’ intention to purchase products in targeted display advertisements is low but still higher than for random products. Notably, Study 2 finds that higher purchase intentions and higher relevance in the ad condition are driven by participants having previously searched for the advertised product.

The findings also state that, on average, products in targeted display advertisements are only somewhat relevant to respondents. However, while participants appear to benefit from the pricing of targeted products, search results can offer better prices and higher-rated vendors.

The researchers only find one major difference in the direction of the results between Study 1 and Study 2. Study 1, without vendor ratings, shows significantly lower purchase intention. Study 2, including vendor ratings, shows a higher purchase intention for higher-rated vendors. Therefore, vendor quality is a relevant factor in consumers’ purchase decisions.

The research results offer insight into understanding the complexities of measuring the impact of targeted ads on consumer welfare. These two studies take a new route and look beyond ad effectiveness and click-through. Using objective and self-reported metrics across three conditions – ads, search, and random, results in low awareness, low-quality, and high-priced vendors. This new empirical study further questions the benefits of behaviorally targeted advertising.

Industry-Research

Do negative headlines drive news traffic?

April 4, 2023 Rande Price, Research VP – DCN

Digital news media is continuously battling for reader attention. With fierce competition for engagement and loyalty, it is crucial to identify what drives online news consumption. A newly released study, Negativity drives online news consumption, analyzes news headlines’ impact on news consumption. The findings confirm that negative emotional words in news headlines increase consumption rates. However, the dataset is from 2013 to 2015. So, while the results are certainly worth consideration, it is important to consider whether the same would hold true today.

Methodology and analysis

This study comprises 22,743 randomized control trials (RCTs) with over 105,000 different variations of news headlines from Upworthy. Each random control test compares different variations of news headlines, an average of 4.31 variations, that all belong to the same news story. The headline variations are then compared to the generated click-through rate (CTR), defined as the ratio of clicks per impression.

The headlines generated approximately 5.7 million clicks and more than 370 million impressions. The research notes that the results are comparable to traditional news sites. However, Upworthy differs from traditional news sources due to their early ‘click-bait’ headline practices. Therefore, there might not be a direct parallel to the headline practices of other types of news sites.

Detailed findings

The research shows that a higher share of negative language in news headlines increases click-throughs, and a higher percentage of positive language decreases them. Headlines with an average length of approximately 15 words with a single negative word increase the click-through rates by 2.3%. In contrast, including a positive word in a news headline significantly decreases the likelihood of CTR by about 1.0%.

Overall, positive words are more common than negative words in the headlines analyzed ‒ 2.83% were positive words versus 2.62% negative words. Click-throughs overall are low, with the average CTR across all trial experiments at 1.39%, and the median click rate at 1.07%. Only a small proportion of the news headlines tested were associated with a high CTR.

The research also tests headlines across various news topics – economics, entertainment, lifestyle, etc. Interestingly, they found no difference in click-throughs across content categories. Further, the report notes an analysis in which the researchers study the effects of four emotions (anger, fear, joy, and sadness) and their role in news consumption. Words like sadness increase click-through rates, while words about fear decrease them.

A statistically significant and positive coefficient for sadness increases the probability of a user clicking the headline by 0.7%
A statistically significant negative effect for joy and fear decreases the probability of a user clicking on a headline by 0.9% and 0.7%, respectively.
No statistical coefficient estimates for anger.

Again, it’s important to understand the emotional response to these words today compared to the original testing.

The study’s research integrity is not in question here. This research offers insight into how the presence of certain words links to behavior from 2013 to 2015. However, digital media, news delivery and consumption platforms, and the internet itself constantly evolve. Therefore, while the study provides interesting insights on language choices in headlines, it might not hold true today. Updated research is essential to understand if the emotional effects on readership remain the same.