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

Advertising | Diversity, Equity & Inclusion | Industry-Research

LGBTQ+ representation impacts advertising

When brands connect to consumers through advertising content, it has an impact beyond selling products. Consumers are highly aware of what brands say, and what corporations do to support diversity, equity, and inclusion. Pragmatically, inclusive marketing makes sense, but how well is “purpose” integrated into the brand experience? A new report, LGBTQ+ and the future of CX from DISQO and Do the WeRQ, explores how people factor brand purpose into their purchase journey decisions.

DISQO and Do the WeRQ surveyed more than 9,000 people to explore the consumer experience with LGBTQ+ advertising content.

Marketplace

LGBTQ+ is the fastest-growing minority segment in the U.S., with an estimated $1.4 trillion in annual spending. The Human Rights Campaign Foundation (HRC) used U.S. Census Bureau data to estimate that at least 20 million U.S. adults identify as LGBTQ+. That’s nearly 8% of the adult population. Additionally, about 21% of Generation Z in the U.S. identify as LGBTQ+.

Getting involved 

This research shows that nearly three-quarters (74%) of people believe brands should get involved in social issues like DE&I, racial equality, gender equality, and social economics. Brands involved in diverse communities are recognized by consumers. Approximately 37% of participants in this research recall seeing LGBTQ+ ads outside of content made specifically for the community. Forty-seven percent of participants recall seeing ads within LGBTQ+ content. Those identifying as LGBTQ+ are more likely to recall seeing ads in content made for them (57%) but are less likely to recall seeing them in mainstream content (33%).

Almost half of those surveyed (46%) agreed or strongly agreed that advertising is adequately inclusive. More than half (52%) said LGBTQ+ ads felt “authentic.” Notably, 64% of people identifying as LGBTQ+ agreed that ads depicting their community felt authentic. However, older consumers are less likely to say that more LGBTQ+ content should be created.

Consumers recognize that brands are influential, and many want to see them exercise this power in support of the LGBTQ+ community. Eight in ten (81%) participants identifying as LGBTQ+ said that brands have some or a lot of influence. Close to half report that brands are essential in bringing about LGBTQ+ progress.

When asked if they ever think about a company’s social and political activities when making a purchase decision, 85% said they did. Less than 15% of people said they never considered this when purchasing.

Generationally, those under 44 years of age are more likely to align a brand’s social influence with their wallets: 18-24 (58%), 25-34 (58%), and 35-44 (57%). Further, 22% of those under 24 said they “always” think about where a brand or company stands when making purchase decisions, 24% for 25-34 and 25% for 35-44. The percentages decline as age increases, with only 12% of people 65+ saying they have these considerations.

Targeting content to LGBTQ+ is growing; this year, fewer people report “not seeing” any LGBTQ+ advertising versus last year (7% versus 20%). The line of cultural margins is shifting, and representation across media platforms offers more racial equality, gender equality, and social economics. LGBTQ+ visibility goes far beyond shout-outs in June. More representation of LGBTQ+ in advertising shows consumers that you see and value them.

Advertising | Industry-Research | Video

TV ads create stronger brand memories compared to other contexts

The age-old question of advertising effectiveness remains front and center in today’s media ecosystem. Given the breadth of content distribution options, how do different platforms such as streaming, mobile, and on-demand compare for building advertising engagement? Comcast Advertising partnered with MediaScience to investigate the impact of watching ads in a traditional TV environment compared to other video environments, like YouTube or Facebook feed on mobile devices.

The report, TV Makes Memories, uses three factors from academic research on memory influencers: attention, connection, and repetition. The research analyzes these three conditions to provide a framework for understanding how effectively TV and mobile environments influence brand memories. 

Methodology

MediaScience recruited 188 participants to view 30-second ads in TV and mobile environments. The TV environment consisted of live TV or a streaming environment with a typical ad load viewed on a large screen. The mobile environment consisted of participants watching short-form video clips on YouTube or in a Facebook feed with ads embedded on a mobile device.

The study exposed viewers to an even mix of well-known and unknown brands, and measures included:

  • Biometrics Eye Tracking to quantify the visual attention to the ads by tracking where viewers are looking on the screen. 
  • Cardiac Deceleration (slowing heart rate) to identify cognitive attention and links to memory formation.
  • Neurometric Intensity to gauge emotional response linked to improved memory formation.

Attention 

Overall, premium content viewed in a TV environment rated more favorably than short-form video and feed-based digital. Additionally, ads viewed in the TV environment had a greater unaided recall and purchase intent than ads shown in a mobile environment. Like this study, earlier Halo Effect research and The Benchmark Series show that ads in a premium environment significantly improve advertising effectiveness scores.

MediaScience’s analysis also showed that cognitive attention improves when participants view an ad in a TV environment preceding the same ad in a mobile environment (versus two digital ads).

Ads viewed in a TV environment receive more visual attention among full TV screen viewers (71%) versus those viewing digital mobile (30%). One reason suggested is that larger screen viewing may be subject to fewer distractions. Interestingly 36% of digital viewing participants never looked at the mobile ad compared to only 6% of TV viewers. 

Connection and repetition

Strong creative messaging is an essential component of memory building. The research found that participants viewing an ad in a TV environment preceding an advertisement in a digital mobile environment rate the creative message better than viewing ads exclusively in a digital environment. 

Ads viewed in a TV environment in their first exposure have 3.4 times better recall than ads viewed in a mobile environment. Addition exposures build upon the original memory and experiences the viewer has about a brand. Notably, while unaided recall increases with a second exposure for both TV and digital mobile, the TV environment viewing experience outperforms mobile. Viewers of one exposure on TV were 40% more likely to recall the brand versus two exposures on digital mobile.

This research offers new empirical data on ad performance in premium content environments, especially in a lean-back TV setting. With advanced media distribution expanding, marketers must know that not all video environments perform similarly. Importantly, ads viewed in a premium TV environment have greater unaided recall and purchase intent than ads in short-form, mobile environments like Facebook or YouTube.

Industry-Research

Key podcast trends: from production to monetization

Most podcasters believe the medium will become even more prevalent over the next two years though metrics and monetization still remain a challenge. Muck Rack’s annual report, The State of Podcasting, shows that while fewer podcasters started their own show this year (41% in 2022 vs. 68% in 2021), productions are emerging across the board.

Muck Rack’s data is based on the responses of 591 professional podcasters surveyed between September 15, 2022, to October 5, 2022.  Overall, survey participants note increased podcast activity. This includes hiring of podcasters by media companies (16%), new offshoots of previous podcasts being produced (13%), and new productions by existing podcast teams (5%).

Further, Muck Rack finds that, while there are fewer full-time podcasters (31% vs. 37% last year), there are more part-time podcasters (69% this year vs. 64% last year). Among the part-timers, 53% work on two or more podcasts, and more than half publish new episodes once a week or more.

Many podcasters note that podcasting is a product of their enjoyment and passion (29%) as well as revenue (27%) and awareness/education (24%). The average podcaster covers three roles at once. Their hats most commonly include promotion/marketing (45%), hosting (43%), and booking guests (39%).

Forty-five percent of professional podcasters have a self-reported audience size of 10K or fewer listeners. Another 25% report having between 10K and 100,000 listeners. While audience size is a good indicator of popularity, many podcasting measuring and hosting services use the number of downloads as a metric for listens. According to Buzzsprout, the top 1% of podcasts generate 4,683 listens or more (downloads). Podcasts that receive 29 listens per episode, or more are within the top 50% of podcasts.

Muck Rack finds that most podcasters use three metrics to measure success: downloads (46%), listens/streams (37%), and consumption rate (34%).

More premium content 

Eight in 10 podcasters report that they are sourcing original content. Inspiration for new content ideas comes from current events (45%), ongoing areas of research (35%), and audience requests (32%). In addition, 22% report that they rely on pitches for new ideas.

Podcasters are also publishing new episodes more frequently than last year. Thirty-one percent publish two or more times per week vs. 24% last year. Importantly, seven in 10 are offering premium content, with the most popular premium content being exclusive and offering bonus episodes (38%) and early release of new episodes (32%).

Four in 5 podcasts sometimes or often include guests. More podcasters now rely on someone on their team to book guests (48% this year vs. 39% last year) and less on themselves to make the booking (59% this year vs. 80% last year).

More than half of podcasters surveyed say that the average length of an episode is between 20-40 minutes long, with a third of them falling in the 30-40-minute range. Interestingly, more than two-thirds of podcasters (67%) record videos of their podcasts.

Distribution and monetization

Consistent with last year, Apple leads (self-reported) in most podcast streams (47%), followed by Google Podcasts (17%) and Spotify (11%). Aside from podcasting sites, most use social media (60%) as an essential channel to reach their audiences, followed by websites (46%) and blogs (40%).

Podcasters are using subscriptions (38%), ads (34%), and premium content (29%) to help monetize their content. Monetization vehicles show substantial increases compared to last year ‒ subscriptions are up 12%, premium content is up 17%, and guests who pay to appear on a show are up 22%.

As podcasting evolves, there is room for growth. Muck Rack finds that most podcasters believe that podcasting’s popularity is driven by our mobile lifestyle (64%) and the convenience of listening to podcasts (59%).

The medium is advancing to offer an integrated listener experience. New formats with text and multimedia elements will be part of the future and market maturity. Podcasters are enthusiastic about the opportunities to push the industry forward while remaining authentic to the medium.

Industry-Research

The news media balancing act: business vs. public service

The news media plays a crucial role in supporting a healthy democracy. Newsrooms are to provide accurate information and holding powerful interests accountable for their action. However, new research shows that most Americans now think news organizations prioritize their business needs over public service. The research highlights a central contradiction of the U.S. news media: It is an institution with critical public duties within a system of little public funding.

The Gallup/Knight Foundation report shows that approximately 76% of U.S. consumers strongly or somewhat agree that most news organizations are “first and foremost businesses, motivated by financial interests.” Only 12% of consumers strongly or somewhat agree that most news organizations are “first and foremost civic institutions, motivated by the public interest.”

This report is Part 1 of a two-part study, American Views 2022. The first part focuses on consumer attitudes and behaviors, and the second will delve into what drives Americans’ trust in news. The analysis includes survey results from over 5,500 U.S adults aged 18 and older.

Nearly two-thirds (62%) of U.S. adults report that news companies lean more toward staying in business than serving consumers. Younger Americans, 67% of Gen Z and 70% of Millennials, are most likely to believe news organizations prioritize their business needs. Only a small percentage (6%) of consumers think news organizations lean toward providing a public service. Importantly, 30% of those surveyed think news organizations balance business needs and public service well.

Further, more republicans (81%) and Independents (82%) than Democrats (69%) strongly or somewhat agree that news organizations are motivated by financial interests than serving the public interest.

The Gallup/Knight analysis shows that the 29% of consumers “very favorable” toward the news media also say news organizations are first and foremost civic institutions. More than double the amount compared to the total consumers at 12%.

According to the Gallop/Knight analysis, almost three-quarters (72%) of Americans report never paying a news organization directly for their content. Among the 26% paying for news content, the majority did so via subscriptions (86%), donations (39%), membership (36%), micropayment (10%), and day pass (5%).

Those more likely to pay for news include:

  • Younger Americans (Gen Z and Gen X)
  • Democrats are more likely than republicans and independents
  • White Americans
  • College educated (four years)
  • High income, more than $150,000

Predictably, those with more favorable attitudes toward news media are willing to pay to access news in the future. One-third of consumers (33%) with favorable attitudes about the news media report having paid for news in some form. Further, 25% of consumers with favorable attitudes about the news media would pay to access news in the future.

Seventy-six percent report their decisions to pay for news depend on the content, and 62% say that the deciding factor is the cost. Gen Z and Millennials are considerably more likely to report that content is an essential decision factor, 82% each.

As new organizations look at new revenue streams, they should carefully target Gen Z and Millennials. We know Gen Z and Millennials index higher on willingness to pay for content. However, they also show a stronger inclination towards paying for events and exclusive content.

Striking a balance between servicing the public and managing a news organization’s financial interests is tied to consumers’ willingness to pay for news content. Ensuring this balance can help drive consumer favorability and grow their willingness to pay for content. Further, younger adults appear more open to diversified revenue streams, such as news organizations charging for events, newsletters, and exclusive content. As younger generations continue to gain buying power, these attitudes could translate into real financial growth opportunities for news outlets.

DCN-Research

DCN explores the rise of, and best practices for, AVOD and FAST services

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:

  1. 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.
  2. 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 Growth bar graphs

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

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 

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

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.

  1. Qualitative interviews with a subset of senior executives from DCN member organizations to discuss business development and strategies for capturing future opportunities.
  2. A quantitative survey among DCN member organizations on their priorities for the future as the subscription economy develops.
  3. 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

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

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

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

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:

  1. Digital taxation,
  2. Competition policy (or antitrust), and
  3. 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.

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