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

As consumers continue to cut the cord at high levels, we see a rise in the adoption of Connected TV (CTV) and free ad-supported TV streaming (FAST) services. What’s old is new again, and the reinvention of free TV is happening now.

Digital Content Next (DCN) partnered with Magid to uncover insights on how the streaming market is developing and to take advantage of the growth in AVOD and FAST. DCN’s new report, The Rise of and Best Practices for AVOD/FAST, exclusive to DCN members, focuses on FAST and the recent consumer response to these services. The report provides thought leadership and best practices for media brands looking to develop and expand a FAST business model.

The methodology includes:

Qualitative interviews with a subset of senior executives from DCN member organizations and secondary research to provide a competitive analysis, content and monetization strategies, distribution plans, and platform partnerships.
Quantitative survey analysis utilizing Magid’s proprietary Video Entertainment Study (VES) to offer consumer tracking, segmentation, and forecasting models in the AVOD and FAST marketplace.

Growth of AVOD/FAST

A post-pandemic mindset and rising inflation are changing consumer attitudes and needs. We see consumers leaning towards FAST services as they become more mindful of their budgets and cut their pay TV cords.

According to Magid’s proprietary data, 82% of U.S. households consume subscription video-on-demand (SVOD) and have at least one paid streaming service. While the growth in SVOD is near saturation, AVOD and FAST channels on streaming services are growing even faster. Since 2019, AVOD/FAST grew by 55% compared to 28% for SVOD. In fact, most Americans (62%) now report using at least one AVOD or FAST service as subscribers or viewers.

AVOD/FAST is now the second most common platform for viewing professional video content among those under 50 and the highest among millennials. The usage growth among 13-24-year-olds is even more pronounced (+15% points since 2020). Media brands must pay attention to the viewing habits of Gen Z, the largest generation, as they mature in the marketplace.

The intention to cut the cord accelerated in 2021 (36% growth among 18–64-year-olds and 70% among 18-34-year-olds between March 2021 and December 2021) and is driving the growth of CTV devices in the home.

Ad market and business opportunities

According to Variety, the forecast for the advertising revenue of FAST channels in the U.S. will total more than $6.0 billion dollars by 2025. This marks an increase of about $3.0 billion dollars compared with the estimate in 2022. Furthermore, nScreenMedia forecasts that the average CPM will also increase from $14 in 2022 to $18 in 2024 due to targeting and advertiser competition for inventory.

In an increasingly “platform agnostic” world, an important way for media brands to boost relevance is by being omnipresent. Today’s consumers do not care where they get the content they want. AVOD and FAST offer an opportunity to reach untapped audiences and to meet different audiences “where they are.” The growth of AVOD and FAST is creating a bigger pie rather than dividing the pie into narrower slices. Senior executives at DCN member organizations believe AVOD and FAST are more additive than cannibalistic.

AVOD and FAST are growing in audience and influence because they offer affordable and appealing options for consumers to access a wide range of content without paying for a subscription. DCN’s The Rise of and Best Practices for AVOD/FAST identifies essential strategies for media brands to navigate at the forefront of this significant shift in the current video distribution space.

Full research report for DCN members only. Register to download. The link will appear immediately below. If you’ve already registered, the login button is on the top right of the page.

Industry-Research

Fake news sites impact readers and the entire industry

September 28, 2022 Rande Price, Research VP – DCN

Since 2004 almost 1,800 local newspapers have closed their doors in the U.S. alone. Oddly, though — and despite an economic downturn — it appears that a slew of new local news outlets have emerged online. Unfortunately, one needs to take a good look under the hood before celebrating this trend.

In October 2019, the Lansing State Journal uncovered dozens of websites branded as local news outlets throughout Michigan that posed as local news but instead were outlets for political messaging. Again in 2020, The New York Times reported that the local site, Maine Business Daily, is part of a network of 1,300 questionable websites. They look like local-news outlets, but the stories are directed by political and corporate public relations firms. Algorithms create much of the content on these sites.

While investigative reporting uncovered these sites, little is known about their impact on readers. The Tow Center’s new report, Reader perspectives on local partisan news sites, examines how local news audiences assess and interpret these so-called news sites. In particular, the research explores whether news consumers infer any bias in the reporting of these sites, how they navigate and respond to these pseudo-local news websites, and how this affects consumer trust in news.

Methodology

The Tow Center recruited 90 participants to assess these local news sites.

Participants completed an initial survey about their local news consumption habits and needs and assessed their assigned local website.

They completed a daily diary exercise to detail their experience of using their assigned website and other local news outlets over five consecutive days.
Participants offered a final reflection about their assigned website, addressing issues such as how, if at all, it improved their understanding of local issues and assessed trustworthiness.

Local site general assessment

Two-thirds of participants recorded an initial negative impression of their assigned website. Reasons for a negative response included the lack of updates and relevant content. The remaining third reported a positive impression, they noted a favorable impression of the sites’ layout and design, lack of paywalls, and mobile responsiveness. Interestingly, only one-third of participants claimed there was conservative bias in their assigned outlet’s editorial coverage.

The most common response from participants throughout the five-day diary exercise was frustration at the lack of new content and the prominence of outdated content on the homepage. Upon repeated visits, they found the content mostly irrelevant to their daily lives and communities and noted it as “odd,” “weird,” and “bizarre.”

Supplied with automated, data-filled stories, these local sites offered few articles with reporter bylines. Most participants found the automated stories to be disconnected from their communities. In addition, respondents reported that the sites were all about politics and little of anything else.

Perceptions of trustworthiness and bias

While most final impressions were negative, the question of these sites’ trustworthiness and potential bias was somewhat mixed. Many participants excused the sites for their low-cost, algorithmically generated output. While most participants rated the outlets as untrustworthy, there was a narrow majority rating the coverage as fair and balanced.

A strong majority did not look for information about site ownership until prompted and said it did not cross their minds to investigate even with an unfamiliar news source. Only a minority of participants investigated the ownership of their assigned site and describing the lack of transparency as “shocking,” “unsettling,” “odd,” and “worrying.”

Despite the industry’s emphasis on fake news and misinformation, some participants accepted these sites at face value, despite the site’s clear lack of objectivity and partisan status. Consumers do not seem to focus on identifying who owns and operates a news source. Unfortunately, their opinions of this sort of site will affect the broader industry as they fail to distinguish between these partisan sites and legitimate news sources. With the 2024 elections approaching, the news media must address consumers about the importance of considering the source of their information and reinforcing the value of trusted, reputable local news brands.

Research

INMA identifies new approaches to attract a Gen Z audience

September 20, 2022 Rande Price, Research VP – DCN

Whether reliant on advertising, subscription revenue, or a combination of both, attracting new audiences is a critical component of media success. And, given that Gen Z is the largest generation, the cohort takes on particular significance. While they consume about the same amount of news as Millennials, they use it much differently than previous generations. Therefore, it is critical that media leaders understand their specific consumption style to attract this younger audience.

The International News Media Association (INMA)’s new report, What Gen Z + Media Need From Each Other, identifies strategies to grow digital news media appeal among the Gen Z audience. Author Paula Felps explores six case studies to see how news media companies are experimenting with connecting with Gen Z. The case studies were on Germany’s Funke Zentralredaktion, The Wall Street Journal in the U.S., Norway’s Dagens Næringsliv, The News Movement in London, The Sydney Morning Herald, and The Australian in Australia.

Understanding Gen Z

The report first offers insight for a better understanding of Gen Z’s news consumption habits and what drives those habits. Felps cites Reuters Institute report to profile Gen Z’s digital consumption habits, and McKinsey and EY research to identify levels of engagement.

Attitude and behavioral differences identified in the research reports:

Most Gen Zs turn to social media platforms for news coverage. WhatsApp and Instagram are growing. However, TikTok is becoming the fastest-growing network for news among its younger users. Forty percent of 18 to 24 years old use TikTok and 15% of them use it for news. (Reuters Institute)
Gen Z is very inclusive; they reject hierarchy and crave transparency. (McKinsey)
Making news more understandable and balanced is key to reaching this age group. (McKinsey)
Authenticity is a significant personal value. Issues like climate change, racial injustice, and health care are authentic concerns of Gen Z. (EY)
Gen Z doesn’t want more crisis coverage. (Reuters Institute)

Attracting the Gen Z audience

The case studies covered in the report reveal that experimentation is essential in attracting Gen Z. Two of the successful initiatives included are Funke Zentralredaktion and The Wall Street Journal.

Funke Zentralredaktion creation of a political TikTok channel is a strong example of attracting and growing a Gen Z audience. Funke used TikTok to introduce top politicians to the platform and asked them questions concerning the Gen Z demographic. The TikTok videos included serious issues but maintained a creative and modern look using filters, emojis, and sounds. The channel grew to nearly 70,000 followers in less than one year, with some videos reaching more than 3 million views.

Important lessons learned from Funke Zentralredaktion’s Gen Z subscribers:

Approach serious topics in a creative manner.
Ensure that the topic is relatable; find the right angle to address.
Meet Gen Z on their platforms, e.g., TikTok.

The Wall Street Journal (WSJ), part of Dow Jones, created a student membership program to capture college students to create new readership habits. WSJ learned the great value of acquiring younger subscribers and creating a lifelong relationship with the brand.

Important lessons learned from the Wall Street Journal’s Gen Z subscribers:

Less news in more formats, offer alternatives to reading news like podcasts or videos.
Free and easy, meaning content needs to be compelling and cost-conscious subscription pricing.
Digital only and be present where they are – such as Instagram and TikTok.
Personalize to attract, engage, and retain this audience.

Hiring Gen Z in the newsroom

Another aspect of attracting this younger audience that the report covers is their critical role as content creators. One example offered in the report is that of The News Movement. Created by two news veterans, William Lewis, former chief executive of Dow Jones, and Kamal Ahmed, former editorial director at the BBC, the goal of this news platform is to commission and produce content by and for Gen Z. The News Movement distributes its content on Gen Z’s their favorite platforms (i.e., TikTok and Instagram) as well as on its own site. It also has partnerships with the Associated Press (AP) and others to help it produce content. It’s presently in beta.

Felps’ INMA report identifies new approaches for the news media to experiment with to attract Gen Z, like using video or podcast formats and creative filters.

To ensure future sustainability, media companies must engage with Gen Z to offer news that is more understandable and relatable. And, in addition to meeting this audience where they already are, by distributing content on the platforms and in the formats this generation prefers, it is also critical that media leaders understand that Gen Zers must be included on staff and afforded a voice in the newsroom.

DCN-Research | Research

It’s a critical time to refocus your subscription strategy

September 15, 2022 Rande Price, Research VP – DCN

Over the past 20-plus years, digital subscriptions have become essential to sustainable growth for media companies as part of their revenue diversification strategy. We know the pandemic created a strong consumer appetite for subscriptions. However, the digital media industry is wisely considering the future trajectory as the subscription marketplace faces heightened competition and inflation.

The research

Digital Content Next (DCN) partnered with FT Strategies to better understand the digital subscription market, explore the macroeconomic influences, and identify best practices for future growth.

The research, Navigating the Future of Digital Subscriptions, used a three-prong approach to analyze market conditions and identify business practices for subscription growth.

Qualitative interviews with a subset of senior executives from DCN member organizations to discuss business development and strategies for capturing future opportunities.
A quantitative survey among DCN member organizations on their priorities for the future as the subscription economy develops.
Review of data, analyses, and reports from the government, financial institutions, industry, trade organizations, trade publications, and consulting firms to identify and explain factors affecting the overall economic climate in the U.S. and their impact on the digital subscription economy.

Macro analysis

The Covid pandemic was a critical inflection point that significantly impacted consumer behavior and subscription offerings in the digital content market. However, as the effects of the pandemic wane, the market faces new economic pressures.

On the business side, higher interest rates could affect business investment. For consumers, increasing inflation rates, accelerating price-increases, and the reduction in consumer savings may force many to cut back on what they deem non-essential. Further, falling unemployment rates impact digital media companies in acquiring and retaining talent, which can also add costs.

Even with the economic factors plaguing the market, our analysis concludes that the digital subscription economy is expected to continue its strong growth and is somewhat insulated from adverse economic conditions. However, digital content companies must be mindful of the risks posed by the changing macroeconomic climate.

The report, which is available to members of DCN, provides details on the economic forecasts for advertising and subscription revenue, plus additional insight into the cost of doing business and the competitive marketplace. As the subscription economy continues to grow over the next three years, audiences will likely be the target of many subscription businesses from a broader set of media outlets.

Navigating the future

The research outlines four areas of focus on how best to navigate and implement new strategies for future growth in digital subscriptions.

Align the subscription mission with a highly collaborative organizational structure.
Find and leverage the right audience data to act as a common language across the organization.
Think more broadly about what innovation means to attract new audiences.
Expand content distribution to accelerate audience growth.

Digital media companies are in a stronger position now to invest and prioritize their subscription business. While overall market projections look positive, monitoring and responding to shifts in macroeconomic factors is essential to inform how best to navigate the future of the digital subscription business. The full report includes a macro analysis of current market conditions, market forecast, and steps to navigate future subscription growth.

Full research report for DCN members only. Register to download. The link will appear immediately below. If you’re already registered, the login button is on the top right of the page.

Industry-Research

Post-Covid TV viewership slows and goes on-demand

August 30, 2022 Rande Price, Research VP – DCN

As in many countries, TV and video viewership in the UK registered a surge during Covid. However, as consumers re-emerged from lockdowns, TV viewing time declined. Ofcom’s fifth annual Media Nations UK 2022 Report offers insight into viewership patterns in the UK and the audience shift to on-demand platforms.

On-demand takes time viewed

Total viewing time for TV and video in 2021 was 5 hours and 16 minutes per person per day, a decline of 25 minutes in 2020 but up from 2019.

Time spent on broadcasters, across live TV, recordings, and on-demand, declined by 9% compared to 2020 and 4% in 2019. As a result, broadcasters’ share of viewing continues to fall from 67% in 2019, to 61% in 2020, to 59% in 2021. Interestingly, broadcast video-on-demand (BVOD) increased by an average of three minutes per person per day compared to 2020, growing its viewership share from 6% to 8% in 2021.

Time viewing SVOD, at 58 minutes per day per person, declined by 6% from 2020. However, SVOD maintained its share of viewing, from 19% in 2020 to 18% in 2021.

SVOD market matures

Subscriptions to SVOD services (at least one service) declined slightly in the UK from 68% to 67%, or19.2 million households, compared to Q1 2022.

However, Ofcom’s analysis confirms a high concentration of multiple SVOD services among UK households. Nearly half of all UK households (46%), which is approximately 13.2 million, access two or more services in Q1 2022. Furthermore, of these households, 5.2 million—or about one in five homes—subscribe to the three most popular services: Netflix, Amazon Prime Video, and Disney+.

Netflix remains the largest SVOD provider in the UK, with 17.1 million households (60%) subscribing. It’s followed by Amazon Prime Video (46%) and Disney+ (23%).

Maintaining subscribers is crucial in a competitive SVOD market. According to Ofcom’s report, 2% of Netflix users, 4% of Amazon Prime Video users, and Disney+ users canceled their subscriptions in the past three months. Ofcom’s Public Service Media (PSM) tracker identified cost as the top reason for cancellation.

Audience attitudes

In addition to time spent, the Ofcom report provides details on viewer satisfaction and offers insight into audience engagement. Eighty-six percent of consumers who used Netflix in the past six months said they were satisfied with the service, while 81% said the same about Amazon Prime Video and Disney+, respectively.

Top Netflix attribute scores:

Provides services that are easy to find my way around (82%);
easy to find something I want to watch (80%);
Appeals to a wide range of different audiences (82%); and
has programs that are relevant to me (75%).

Top Disney+ attribute scores:

Easy to find my way around (78%);
easy to find something I want to watch (74%); and
appeals to a wide range of different audiences (73%).

SVOD market growth

Overall, the SVOD market performed strongly in 2021. It generated approximately $3.2 billion (or about £2.7 billion), an increase of 27% compared to last year. The top three services—Netflix, Amazon Prime Video, and Disney+—accounted for 89% of the market share.

Ofcom’s analysis highlights the evolving TV and video landscape and the divide between younger and older viewers. Almost nine in ten adults, 18-24, go straight to streaming, on-demand, and social video services when looking for something to watch. In contrast, 59% of adults aged 55-64, and 76% of adults who are 65+, turn to TV channels first.

The report also suggests that streaming services with hybrid business models may become more common among SVOD offerings. Introducing ad-supported tiers (e.g., Netflix and Disney+) subscription opportunities to hard-to-convert viewers may move the dial for new subscribers. As the on-demand market evolves, media companies must consider multiple access points, platforms, and price points to acquire new subscribers to grow their audience share.

Industry-Research

Concerned about algorithmic effects on filter bubbles? Watch out for TV too

August 22, 2022 Rande Price, Research VP – DCN

The terms “echo chamber” and “filter bubble” are often used to describe social media’s selective exposure of news content to audiences. Industry research has found that platforms using algorithmic rankings and recommendations produce less diverse and more segregated audience opinions. However, television news is generally excluded from these analyses. New research, Quantifying partisan news diets in Web and TV audiences, seeks to illuminate the impact of television news as a driver of partisan ideology.

Authors, Daniel Muise, Homa Hosseinmardi, Baird Howland, Maarkus Mobius, David Rothschild, and Duncan Watts used nationally representative panel data between 2016 and 2019 to analyze minute-level usage from national TV tracking and second-level laptop/desktop browser tracking. They conclude that partisan audience segregation affects between three and four times more Americans via TV news than online news.

On average, the report says that 17% of Americans are partisan segregated through television news. However, they find that only 4% of Americans’ partisan-bias is a result of online news. This contrasts starkly with the belief that the digital ecosystem has amplified echo-chambers.

TV news’ partisan audience

The research also finds that television news consumers are likelier to maintain their partisan news consumption for a longer time than online audiences. While right-segregated online news consumers are somewhat more likely to remain segregated after 1 month (29.1%), and more than three times as likely to remain after 6 months (6.3%), online partisan segregation—when it arises—is generally fleeting at the monthly level.

News source exclusivity

One significant factor is the number of sources for news available in each medium. While the online news environment offers numerous choices, TV news viewers still only have a handful of sources. And, once they’ve chosen, it becomes the default choice. The research finds that TV audiences do not stray from their most preferred sources compared to online audiences. Among partisan TV news viewers, those who consume mostly MSNBC rarely consume news from any other source besides CNN. Further, audiences that consume mostly Fox News do not go elsewhere for TV news content.

Online audiences, however, tend to be more inclusive in preferences for their news content and include some mainstream and moderate sources.

Demographic analysis

The authors also analyze TV and online news consumption by age, race, and educational level. Not surprisingly, partisan segregation is much more apparent among older adults in the TV audience. Interestingly, adults 55 years old and older viewers lean toward right-leaning biased segregation. In contrast, older adults are more likely than younger adults to be partisan segregated to the left via online news.

White Americans are far more likely to be partisan segregated to the right on either platform than Americans who do not identify as white. The most partisan-segregated news consumers are postgraduate degree holders on the left. Seventeen percent of highly educated Americans are TV news consumers whose news diet is mainly left-leaning.

This research finds that segregation is more prevalent, concentrated, and persistent on TV than online. While the overall TV news audience is shrinking, the partisan TV news audience is growing in absolute terms. TV news audiences are undergoing a cleansing process of alternative viewpoints, and there are consequences for our democracy. Significantly, this research establishes a clear need to consider television when examining the existence and impact of filter bubbles.

Research

Adopting influencer practices can help journalists reach younger audiences

August 16, 2022 Rande Price, Research VP – DCN

Getting attention and creating awareness is vital to influencers and journalists since both compete in the same attention economy. As part of her Polis Newsroom Fellowship at the London School of Economics, Salla-Rosa Leinonen explores the idea of adopting an influencer style of journalism to bring the audience closer to the newsroom. In her new report Can Journalists be Influencers? she makes the case for newsrooms to support staff who want to experiment with a journo-influencer role to help build credibility among a younger target audience.

A vehicle to reach a younger audience

Influencers create original content with a distinct and authentic voice. Building creditability among a younger audience is an effective tool for marketing, branded content, and endorsements. Effective influencers attract a lot of attention on social channels like TikTok, Snapchat, and Instagram. Leinonen suggests that journalists who want to reach a younger audience implement influencer practices on social media.

Notably, a new study from UK communications regulator Ofcam shows that for the first time, Instagram is the most popular news source among younger people (22%) of teens, with TikTok and YouTube close behind. Further, TikTok users participating in the study said they get more of their news from “other people they follow” (47%) than from news organizations’ accounts (24%). Another study, Reuters Digital News Report, also shows that 40% of young adults, 18- 24, report using social media as their main news source. Therefore, social media provides a critical point of connection for younger news consumers.

As part of her research, Leinonen interviewed Olivia Le Poidevin, a BBC reporter, to discuss the similarities between the journalists and influences. Poidevin noted that journalists use the news as a vehicle to connect to the audience, while influencers use their content. However, Poidevin concludes that there is a convergence between news and content. She states, “Up to now; there has been a clear division between ‘content’ and ‘news,’ in many media organizations as if they were two separate worlds. From the audience’s point of view, they are not separate; they are the same.”

Benefits of being an influential journalist

The report defines the role of an “influential journalist” as someone who gains awareness or fame through more traditional modes of journalism but also uses social media to build their following. Only pieces of their content like article excerpts, snippets, and clips are usually available on social media. They use social media to market, share, and showcase their work with new audiences who are not spending their time on traditional media platforms.

Leinonen cites Sandra Banjac and Folker Hanusch’s research on audiences’ expectations of content creators on Instagram, YouTube, and blogs, compared to journalists. The research finds that both content creators and journalists share many of the same values. These include likeability, the feeling of being directly spoken to, sharing valuable information, and expertise, which all drive followers to seek more information.

Importantly, “journo-influencers” can learn to leverage new storytelling formats without sacrificing the skills and integrity of journalism. They can also connect their journalistic style to their personality to build trust with their followers. This report suggests that journalists rethink their news reporting process as content creation to generate an authentic voice to connect to younger audiences.

Industry-Research | Policy

Research explores the best way to balance big tech and journalism

August 3, 2022 Rande Price, Research VP – DCN

The Australia 2021 News Media Bargaining Code and the European Union (EU) 2021 Digital Copyright Directive are two examples of policies that establish a more equitable financial arrangement between big tech platforms and digital news organizations. They center around the understanding that platforms derive a benefit from news content and that publishers are not compensated for the way in which these platforms profit from their content. Courtney C. Radsch examines the different policies in her report, Making Big Tech Pay for the News They Use to offer insight into the legislation and its implementation.

With the exception of non-profits, most news organizations employ a commercial model. In the simplest terms, advertising is used to drive revenue to support the news organization. However, intermediaries – notably Google and Facebook – now stand between the publisher and the advertiser. Since search and social media are key ways in which people discover and consume news online, these platforms benefit from the user traffic derived from publishers’ content. They collect personal data on users and group people into demographic and special-interest categories to target advertising to them on their platforms.

Radsch’s research examines how policymakers are working to redirect revenue to compensate news outlets more equitably.

Her report classifies the different policies into three distinct groups:

Digital taxation,
Competition policy (or antitrust), and
Intellectual property.

Taxation

In recent years, taxing digital advertising has gained interest. In 2019, the U.S.-based Free Press proposes a small tax on revenues generated from targeted advertising. This policy was established with Google and Facebook in mind. The taxed revenue would be used to fund public interest media systems.

Radsch notes it’s problematic that the policy does not identify who will monitor and implement a payment distribution system for the news media companies.

While not covered in this report, in 2021, Connecticut, Indiana, New York, Oregon, and Washington introduced state proposals for a new tax on revenues from digital advertising or to expand the state sales tax to digital advertising sales. Interestingly, none of these proposals allocate the tax revenue to news organizations. Connecticut plan suggested the revenue from the tax be dedicated, in part, to funding online bullying prevention efforts and training for social isolation and suicide prevention.

Maryland became the first state to enact such a tax in February 2021. However, these state tax laws face court battles since they likely run afoul of the Constitution’s Commerce clause. This clause restricts the ability of states to regulate commercial activity across state lines, and the Internet Tax Freedom Act prohibits states from levying taxes solely on digital goods or services.

Bargaining power

Other policies are exploring making platforms pay for the news they use, headlines, photos, and snippets. This type of policy forces the platforms to negotiate directly with publishers rather than the government. Australia made headlines in 2021 when it passed this type of legislation requiring Facebook and Google to share algorithmic information with and pay licensing fees to news organizations. The code states that news media companies can bargain individually or collectively for payment from platforms to use their content.

As a result, Google and Facebook threatened to pull their services from the Australian market. Facebook did shut down its service for one week. Both companies ultimately acquiesced and signed deals with Australian publishers.

Intellectual property rights

Many question whether the “fair use” exception in copyright law, the use of a small amount of copyrighted material without prior permission, applies to Google and Facebook.

The 2021 EU Digital Copyright Directive created a right for press publishers, not just authors, to claim copyright, including for snippets of news. In addition to individual publishers being able to strike deals with the various platforms, the Directive allows collective management organizations to negotiate licensing fees and distribute them back to publishers.

In 2021, members of the U.S. Congress proposed a new version of the Journalism Competition and Preservation Act of 2021. This bill would create a four-year safe harbor from antitrust laws for print, broadcast, or digital news companies to collectively negotiate with platforms regarding the use of the news companies’ content. In other words, media news companies could collaborate to discuss bargaining with Google and Facebook without fear of antitrust violation. Despite bipartisan support, the bill appears to have stalled.

Profits and progress

Google and Facebook claim that news content generates little revenue. However, their earning calls suggest otherwise. These companies benefit tremendously from the trusted content and audiences that news publishers deliver.

Radsch’s report calls for platform transparency, including sharing traffic reports and the number of ads served around each news item. This would be a good first step to revealing the amount of revenue the news content generates on the platforms. Once this amount is determined and platforms equitably paid for news content, the relationship between the two can reset. Given the importance of advertising revenue to journalism, it’s important to get this right. Radsch’s report offers guidance and insights that will help policymakers move forward meaningfully.

Industry-Research

The shift to non-game app spending signals change in the mobile market

July 26, 2022 Rande Price, Research VP – DCN

More than half of U.S. app store spending now comes from non-games apps compared to five years ago when games apps accounted for more than two-thirds of total app spending. The shift to non-game apps signals a change in the mobile market from early days, when consumers were less willing to spend on subscriptions or in-app purchases.

According to Sensor Tower’s Q2 2022 Data Digest Report, while spending on mobile games has slowed, the rapid rise of spending on non-games shows a strong potential for growth on mobile. In fact, the report shows that U.S. consumer spending on non-games grew at more than twice the rate of games. Non-games achieved a compound annual growth rate of 40% since June 2014, compared to less than 20% for games.

Spending on non-game apps continues to outpace the spending growth in mobile games. This trend was a reversal from 2019 and 2020, when mobile game spending was consistently higher than non- games apps. While mobile game spending surged at the beginning of the pandemic, by the end of 2020, non-game growth was about equal, then advanced ahead of mobile games by mid-2021.

As the market adjusted itself from the rapid growth registered in the early months of the pandemic, mobile app revenue overall declined year-over-year for the first time in May 2022.

The growing subscription market is helping app growth across a variety of categories. App download activity includes U.S. consumers spending one million dollars across 400 different apps, with a large percentage on subscriptions. Content companies in the U.S. and China controlled the top spots on the App Store, combining for 45% of all installs on the platform in Q2 2022. Top subscription apps include Disney+, HBO Max, and Hulu.

The Sensor Tower methodology includes App Store and Google Play download estimates for April 1, 2022, through June 30, 2022. The estimates use downloads per-user base and only one download per Apple or Google account counts in its total. Downloads of the same app to multiple devices like updates, or re-installs by the same person are not included in the total.

App market overview

Like many entertainment and informational products, U.S. consumer spending on apps soared in April 2020 at the start of the Covid pandemic. Year-over-year growth jumped from around twenty to thirty percent in 2019 to thirty-five to fifty percent in 2020. With app revenue readjusting itself from the rapid growth of Covid’s early days, revenues declined year-over-year for the first time in Q2 2022. It’s important to note, that even with a year-over-year decline, Q2 20222 is up 71% compared to Q2 2019, before the pandemic.

Interestingly, Apple’s App Store generated approximately $43.7 billion from in-app purchases, subscriptions, and premium apps and games in the U.S., up 5.6% year over year. In contrast, Google’s store registered $21.3 billion, down 7.4% year over year.

TikTok was the number one download app globally and the number one spot in the U.S. With close to 14 million downloads, it was four million downloads ahead of the second-place app, Facebook. Amazon led as the top shopping app since Q4 2018 in the U.S., however, this ended in Q2 2022. SHEIN, a fast-fashion retail app based in China, ranks as the number one shopping app with the most U.S. downloads.

App downloads signal a return to norms

The Q2 report shows U.S. consumers returning to pre-pandemic activities. Travel apps received record high downloads while airline mobile apps increased more than 30% compared to Q2 2019. Further, consumers want to attend concerts and in-person sporting events, with the top five ticketing apps registering more than 10 million downloads combined, an increase of 70% compared to pre-pandemic Q2 2019.

Tracking mobile downloads, app popularity over time, and spending across app categories offers insight into consumer actions, activities, and shifts in behavior – all drivers of market share. Sensor Tower app download and spend analysis identifies a positive shift in consumers’ willingness to make purchases on their phones. It also shows consumers shifting app categories from mobile games to non-game apps, namely subscriptions, and a return to some pre-Covid activities.

Industry-Research

Advertisers should be watching CTV

July 19, 2022 Rande Price, Research VP – DCN

As consumers find their way to connected TV (CTV) content, so do marketers. CTV and streaming products help media companies extend their content reach and tap into a strong-growing demand for content. To that end, we’re witnessing the rise of AVOD and FAST services, which broaden the reach of streaming beyond the premium content consumer. While consumers benefit from lower-cost alternatives, advertisers are keen to capitalize on a broader consumer base.

Attractive marketplace

Advertisers see a significant advantage in CTV as it combines the value of television engagement with the precision of digital buying and targeting. The ads are usually not skippable, appear in regular ad breaks, and are indistinguishable from cable television ads in production quality.

eMarketer forecasts 204.1 million connected TV users, representing 60.1% of the population this year. They also project CTV ad revenues to increase 35% to $6.41 billion this year from upfront sales and to grow another 35% to $8.14 billion in 2023.

In fact, a new survey by Advertiser Perceptions and Premion reports that 66% of advertisers are shifting budgets from digital, social, and linear TV to fund CTV/OTT spend increases.

Quality, volume, and device

CTV streaming content is in the early stages of developing effective optimization for programmatic inventory. Peer39, an intelligence platform for contextual targeting and analytics, offers insight into CTV’s inventory quality. Their Programmatic CTV Benchmark report provides an additional level of transparency to better understand how CTV campaigns compare to the rest of the industry.

The Q1 2022 report found that fake CTV content accounted for 4.43% of all ad calls. Fake content is content that doesn’t ﬁt the scope of TV content. It’s likely to be screensaver channels, photo widgets, games, and mobile. Peer39 found the largest share of fake CTV content was among mobile apps pretending to be CTV streaming content in programmatic marketplaces. Approximately 2% to 18.5% of CTV inventory ran on fake content and about 13% of total impression volume per campaign ran on user-generated and non-professionally produced content.

The programmatic CTV market is run primarily on three key devices, with Roku, Amazon Fire, and Samsung accounting for nine out of ten impressions. Not surprisingly, CTV is a medium for series and movies, and to a lesser extent, live tv for sports and news.

Regarding the top OTT services by impression volume, Pluto TV stands above all, accounting for 59% of total impressions in open programmatic auctions. Hulu, Sling, and Viacom’s EyeQ only account for 2% of impressions, each.

Effective ad market

According to ExchangeWire, CTV streaming advertising is proving to be more effective than traditional TV advertising, as CTV viewers are 42% more likely to buy advertised products because of the ads viewed. Importantly, content players have insight into what viewers watch, when, and how often. Extracting data in a privacy-compliant manner is essential for profiling and targeting a valuable CTV audience.

The combination of digital reach and television content makes CTV streaming ad inventory especially valuable to marketers looking to reach broad audiences. It allows media companies to attract younger audiences of cord-cutters and “cord-never” consumers, the early adopters of CTV platforms. It presents an additional advertising route for media organizations and uses their first-party data and contextual insight to reinforce the value of video monetization.

Industry-Research

Key trends shaping the booming streaming market

June 28, 2022 Rande Price, Research VP – DCN

Earlier this year, Tubi forecasted that free streaming audiences would grow more than paid streaming by mid-2022. Fast-forward to comScore’s new State of Streaming 2022 Report, which backs up this prediction. The comScore data shows that consumers are adopting ad-supported streaming services faster than non-advertising supported streaming services (29% vs. 21% over the last three years). comScore’s analysis uses 13 million Smart TV devices from two primary Automatic Content Recognition (ACR) service providers.

Streaming is thriving, and the industry forecasts continued growth. Even while Wall Street questions the performance of streaming brands and their less explosive growth since the pandemic, subscriptions and viewing time continue to grow.

The overall market for subscription video on demand (SVOD) is substantial. The new PwC Global Entertainment & Media Outlook 2022–2026 projects that the 2022 SVOD marketplace in the U.S will generate $25.3 billion, up 13% from last year. PwC projects this segment to reach $33.6 billion by 2026, representing a conservative growth rate of 8.5% compound annual growth rate from 2021-26.

Subscriptions per household are growing watching watched 5.4 streaming services per month as of March 2022, compared to 4.7 in March 2021. In March 2022, the “Big Five” streaming services (Netflix, YouTube, Hulu, Amazon, and Disney) became the “Big Six,” now including HBO Max. The Netflix audiences overlap with 82% of the other top six streaming services, especially Amazon (66%) and YouTube (66%).

Big 6 services

According to the PwC’s report, global SVOD subscriptions will increase by 485 million between 2021 and 2027 to reach 1.7 billion. The six US-based platforms will have 988 million paying SVOD subscribers by 2027, up from 612 million in 2021. PwC views Netflix as the revenue winner, with $34 billion by 2027, similar to Disney+, HBO Max, and Paramount+ combined.

Device market share

Connected TVs (CTV) are the largest segment of streaming devices at 137 million in 2022 compared to 114 million in 2020. However, Smart TVs are the fastest-growing segment of streaming devices, up 48% YOY from 38 million in 2020 to 56 million in 2022. While Samsung has the largest market share among Smart TV manufacturers in 2022 at 26%, it declined from its high of 31% in 2020. Other top manufacturers include Alcatel/TCL at 15% market share in 2022, down from 14% in 2020, and Vizio at 14% in 2022, flat compared to 2020.

Eight in ten (79%) of Wifi-enabled homes watch streaming content on connected TV devices. Each of these households spends approximately 122 hours per month streaming, an increase of 19% from March 2021. Of all services, Netflix captures the most hours per month watched at 43 hours, followed closely by YouTube at 39 hours and Hulu at 33 hours.

It’s essential to distinguish the terms CTV (connected TV) and OTT (over-the-top). CTV is the device that connects to or is embedded in television to stream video content. It’s the hardware – Smart TVs, gaming consoles (used to stream video content), Roku, Amazon Fire TV, and Apple TV. OTT refers to content viewed over the internet.

Diversifying audience growth

Diverse audiences now account for more than 40% of Wifi-enabled households viewing connected TV content in the U.S.

Hispanic audiences, the largest segment of diverse homes that stream, over-index for Netflix, YouTube, FuboTV, and Sling.
African Americans over-index for Amazon, FuboTV, YouTube, and Pluto in terms of the streaming platforms viewing days per household.
Asians over-index for HBO Max, Hulu, YouTube, and Sling.

Analysts question how the SVOD market will continue to grow. Many believe teens and Gen Z will drive the market as short-form video platforms like TikTok move into longer-form content. Others suggest the SVOD platforms will increase as more countries gain broader internet access.

New partnerships, mergers, and more offerings will likely continue marketplace growth. The consumer needs to be front and center as competition grows to evolve an individualized and personalized user experience.

side shot of laptop with one hand on keyboard and another person's hand pointing to screen

Industry-Research

How the right CMS can accelerate digital transformation for publishers

June 21, 2022 Rande Price, Research VP – DCN

Digital news consumption is a daily habit for most consumers. But they have high expectations. Audiences want news to be timely and offer easily discoverable news content.

An underperforming website infrastructure can be a crucial barrier for publishers. In moving toward digital transformation, publishers must upgrade their:

User experience,
Ease of discovery of news and information of interest, and
Mobile optimization of both content and advertising.

The Knight Foundation worked with a small group of Black-owned local media outlets to upgrade their publishing solutions to serve underrepresented communities. Members of this group faced challenges, from aging technology to legacy website standards. The five organizations participating in this lab include The Atlanta Voice, The Dallas Weekly, New York Amsterdam News, Houston Defender Network, and The Washington Informer.

While participating in the lab, Atlanta Voice, the Amsterdam News, Houston Defender Network, and The Washington Informer upgraded their content management systems. The Knight Foundation provided grants and guidance for necessary transition and monitored the process. Their report, Digital content platform upgrades for small media outlets, highlights the publishers’ experience and key ﬁndings to assist other small publishers in the process.

Participating Publishers:

Atlanta Voice is the largest audited African American community newspaper in Georgia, with more than 600 print newspaper locations in the Atlanta metro area.
Amsterdam News is one of the country’s oldest published African American newspapers and a leading voice of the black community in the New York region.
Defender, also known as the Houston Defender, is Houston’s leading Black news source and offers breaking news, lifestyle, politics, commentary, and community newsletters.
The Washington Informer is a multimedia news organization that serves the information needs of the African American community in the metropolitan Washington D.C. area.

Determine the right content management system

A content management system (CMS) or platform is what houses the content that publishers produce to serve website visitors. CMS platforms need to quickly load content on browsers across device types, including desktop, tablet, and mobile phones.

After a careful review, the publishers in the study decided on Newspack as their WordPress CMS. Its design targets small and medium-sized digital news organizations specifically. The move to Newspack helped provide the publishers with:

A clean database of imported content.
A better control of story display.
Additional improvements to position a well-performing website.

While transitioning to a new CMS can be challenging and requires technical expertise, Newspack onboarding included support tech and importing all the archived content.

While a CMS is one of the most expensive investments in the digital transformation process, it includes a software-as-a-service (SaaS) model. This helps to reduce the need for additional capital investments. The SaaS model eliminates depreciating hardware like web or database servers.

Beyond the technicalities of transformation

It’s crucial for all stakeholders – including senior management and newsroom staff – to be at the core of a publisher’s digital transformation. Teams need to learn a new process for sharing information, often repositioning themselves. A successful transition means aligning internal teams with your service providers to work together.

Staff development is also critical. An essential function in a digital news organization is that of a web producer. It is necessary to have someone on the team who can produce, edit, and post the digital-ﬁrst news content. Other positions need to evolve as well and fill gaps in old practices that are now online. Publishers needed to think long-term and strategically and not look to ﬁll full-time or part-time roles with outside contractors.

Digital transformation is continuous and the transition to a new CMS is a serious commitment, especially for a small publisher with limited resources. Publishers willing to learn new practices and formulate new workflows will run more efficiently and effectively. The results of this transition link to an engaged audience and more advertising and reader revenue.