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

Streaming strategies are essential for publishers

March 15, 2022 Rande Price, Research VP – DCN

Consumers increasingly cut the cable cord and spend more of their TV time on connected televisions (CTV) enjoying over-the-top (OTT) streaming content. eMarketer forecasts this year’s cord-cutting population will climb to 55.1 million people in the United States. Further, according to the Leichtman Research Group, a connected TV is found in at least 80% of all TV households, and 60% of these viewers in the U.S. watch free ad-supported TV streaming (FAST) services.

Tubi, an ad-supported streaming service owned by Fox Corporation released new research, Audience Insights 2022, which explores what is driving the streaming market. According to the report, early adopters jumped to ad-supported streaming services as an alternative to cable subscriptions. Numerous content options also attract new audiences. Many streamers offer extensive libraries of TV hits, nostalgia, and familiarity. Others feature originals content that feels current, trendy, and innovative. While still others include new blockbuster films or breaking news.

If publishers haven’t already, now is the time to launch a streaming product that leverages their intellectual property (IP) to attract audiences and remain competitive. Options include AVOD (ad-supported video on demand), which provides audiences with a customized and on-demand experience. The marketplace is ripe, and the revenue opportunities are robust.

Booming market

Consumers easily access their Smart TVs, or streaming devices offer simple shortcuts to OTT video. There are many services available in the U.S, and it’s common for a large company to have multiple services. Paramount Global has several paid and free services such as Paramount+, Showtime, BET+, CBS News, and Pluto TV. According to Tubi’s findings, Americans spend $65 a month on average on approximately 4.2 streaming subscriptions.

Tubi conducted its study among 6,000 U.S. adults who stream to understand the barriers to AVOD. Streamers look for an easy onboarding process and simple and intuitive navigation. However, one in four adults report that they don’t believe a service is free because upselling is involved. Further, 23% say that they think there are strings attached.

Given streaming’s audience growth, OTT is now the fastest-growing long-form video platform in advertising sales. Interestingly, upfront CTV advertising sales grew 50% in 2021 and is expected to grow another 32% this year.

Advertising value

Tubi also conducted a study with Advertiser Perceptions, showing that 56% of marketers rate the cost-effectiveness of streaming investment as a 9 or 10 on a ten-point scale. eMarketer predicts strong year-over-year advertising growth – citing $17.4 billion advertising spend on CTV in 2022.

Advertisers value streaming audiences and platforms:

Offer incremental reach of limited linear channels,
Ability to target hard-to-reach on linear like Gen Z and Millennials and Hispanic, Black, and multicultural audiences.
Relevant audiences for targeting higher income and core demographic targets.
Brand-safe environments in extensive content libraries.

Tubi expects older, more educated, and affluent households to continue adopting streaming options this year. The research names OTT as an essential strategy for 2022. It offers new digital distribution channels, instant access to potential viewers, and new opportunities to attract advertisers.

Research

Publishers question AMP’s value

March 8, 2022 Rande Price, Research VP – DCN

Google’s Accelerated Mobile Pages (AMP) promised a faster and better user experience on mobile while helping publishers boost traffic and generate more revenue. Recently, however, a number of digital publishers have announced that they are reassessing their usage of AMP.

Google introduced AMP in 2015 presenting it as open-source code available for developers. Before AMP’s announcement, Apple, Facebook, and Snapchat announced content partnerships (e.g., Apple News, Instant Articles, Snapchat Discover) which focused on improving the consumer experience but shifted the publisher’s content to their platforms. Each of these proprietary, closed services promised consumers easy access to content but offered limited publisher monetary upside.

Industry executives feared that publisher brands would fade in the background on platforms. Others debated that these channels would provide a path to new and younger audiences, which seemed like a fair trade-off for content control. However, AMP had a unique proposition for publishers: They would keep publisher’s content on the “open web” and, maybe more importantly, they’d also gain a special shortcut to the top of Google search results through a new carrousel.

Fast forward to 2022, and publishers increasingly question the value of these partnerships because they add overhead and offer limited revenue or consumer benefit. In particular, AMP appears to restrict some mobile page functionality like detailed navigational paths and search icons. Given these disappointing results, some publishers are testing life without AMP, while others are phasing it out altogether.

It is important to note that, in December 2020, a lawsuit filed by multiple states accused Google of “anti-competitive conduct” in the digital advertising ecosystem. An unredacted version of the court document became available in January 2022, offering additional details. The added information explains that AMP pages hosted on Google’s servers made it difficult for publishers to use auction platforms other than Google’s ad exchange. It also alleges that Google made non-AMP pages load with a one-second delay. This gave publishers even more reason to be skeptical.

Publisher’s response

Digital Content Next (DCN) surveyed its membership earlier this year to provide insight into publishers’ experience with AMP, its impact, and its use in the future. The results show that most respondents use or have used AMP (96%), with the majority re-evaluating (57%) their AMP usage. Close to half (48%) report that they have they stopped or will stop using AMP.

Respondents report that their top reasons for using AMP were the promise of more search traffic, faster website performance, attracting new audiences, and industry pressure. Unfortunately, respondents reported mixed results in some core benefits like increased search traffic and audience development.

AMP’s reassessment

A recent Wall Street Journal (WSJ) article, Publishers Move to Abandon Google-Supported Mobile Web Initiative, essentially confirms the DCN survey results. WSJ reports that Vox Media, BuzzFeed, Complex Networks, and Bustle Digital Group started “testing or are considering using their versions of mobile-optimized article pages.” These publishers are in addition to The Washington Post, which stopped programming AMP pages last year.

Many publishers said they started to review their AMP usage after Google made algorithm changes in 2021. According to the WSJ, Google made changes “so that pages’ loading speeds, interactivity, and visual stability became factored into its search rankings.” Also, AMP content was no longer exclusively featured in a top-stories carousel in search results. Further, as publishers started testing, they learned that dropping AMP did not affect their load time or search ranking.

Reassessing the benefits of using AMP is triggering many publishers to rethink the control of their content, page designs, ad formats, and paywall. Publishers are rightly taking a harder look at content partnerships to evaluate how they fit their editorial and business strategies and monetization goals.

Industry-Research

Collaborative models of journalism offer sustainability

March 1, 2022 Rande Price, Research VP – DCN

The Center for Cooperative Media sees collaborative journalism as a way to share power among journalists, readers and others to deliver information that centers and addresses people’s needs. They believe that collaboration can be particularly impactful when it involves the community.

Researchers Joy Jenkins and Lucas Graves explore collaborative journalism in practice at a local level in Europe. Their report, Do More with Less: Minimizing Competitive Tensions in Collaborative Local Journalism, offers a local approach to journalism that serves a community rather than delivers a news product to an audience.

Their research analyzes three collaborative journalism experiments in Europe:

The Bureau Local in the U.K is a nonprofit collaboration of journalists and non-journalists (data scientists, academics, citizens, etc.) engaging in topic-driven reporting projects.
“L’Italia Delle Slot” in Italy is a collaboration among one legacy, and two start-up news organizations focused on a single topic.
Lännen Media in Finland is a co-op collaboration among regional news organizations through shared content production and distribution.

They conducted 29 interviews among journalists, senior management, community organizers, data analysts, technical experts, and others.

Collaboration models

Each of the three publications offers different collaboration models:

Lännen Media

This is a co-op model where similar news organizations join on specific topics and do not compete. They manage daily reports via video conferencing and skype with editors and share a content management system to follow what they work on in the different newsrooms.

This setup allows journalists to rotate into the cooperative from the regional newsrooms for two or three years and then return to their original masthead. While larger newspapers contribute more, all members share the costs of running Lännen Media.

“L’Italia Delle Slot

A contractor model that establishes a commercial contract to dictate the collaboration among organizations with specific areas of expertise. In this case, a large legacy news publisher combines efforts with two data-journalism-focused start-ups. In 2013, Effecinque, a start-up, began researching the increase in slot machines in Italy. Effecinque partnered with Dataninja, a data-journalism network, to investigate if slot machines in Italy correlated to the rise in gambling addiction. Effecinque and Dataninja partnered with GEDI Visual Lab to produce a web portal, data visualizations, videos, and other interactive content to showcase the details of the investigation.

This approach allowed the two start-up organizations, GEDI and 13 local newspapers, to define their roles based on areas of expertise. Further, the 13 local newsrooms provided local knowledge to tell the stories about their community using the data set.

The digital media ecosystem is a great environment to start collaborations such as establishing networks across localities and shared resources. Jenkins’ and Grave’s research illustrates three collaborative journalism models to showcase each of their unique approaches. Lännen Media’s co-op model shares resources across regional newspapers, “L’Italia Delle Slot’s” contractor model engages expert journalists on short-term investigations. The Bureau Local NGO model manages a shared database by a nonprofit. Each model offers a viable model for publisher sustainability – maintaining a healthy structure of shared economics, goals, and healthy competition.

Industry-Research

Does sponsored content influence broader news agendas?

February 23, 2022 Rande Price, Research VP – DCN

Sponsored content plays a sizeable role in publishers’ revenue model. According to eMarketer, ad spend on sponsored content in 2021 neared $57 billion. Advertisers find the high production quality of today’s sponsored content a compelling marketing vehicle. As a result, audiences often find it difficult to differentiate between sponsor content and actual news content. Therefore, the FTC requires publishers to label it as advertising. As the market for it grows, it’s essential to understand how the publishers’ production and reliance on sponsored content affects news content.

An advertising quandary

While sponsored content has been around a long time, it’s grown significantly in the past 10 years in the digital media sector. Marketers value the “halo effect” of a publisher’s editorial integrity offering strong reader engagement. Sponsored content is usually a narrative, which contrasts with display and video ads. It often includes custom video, interactive elements, and high-end graphic designs.

Many premium publishers have content studios dedicated to creating sponsored content. The New York Times (NYT) launched T Brand Studio, The Washington Post (WP) owns BrandStudio, and The Wall Street Journal (WSJ) has The Trust.

A recent article by Michelle Amazeen looks at how sponsored content relates to the coverage news organizations create. She explores whether sponsored content boosts or reduces the amount of media coverage for corporations that invest in it. Amazeen conducted research with Christopher Vargo, Agenda-Cutting Versus Agenda-Building: Does Sponsored Content Influence Corporate News Coverage in U.S. Media, to analyze these questions.

Research methodology

In a two-step process, Amazeen and Vargo identified 27 sponsored content articles in WP, the NYT, and WSJ across five years. They first scraped the content studios’ Twitter accounts to identify sponsored content links. They then used a custom Bing program to search for sponsored content links inside the news websites. The 27 sponsors include Verizon, Airbus, Volvo, American Petroleum Institute, Dow Jones, Qualcomm, Holiday Inn, Huawei, Purdue Pharma, Netflix, Gartner, Subaru, Oracle, Fox Sports, Deloitte, Walmart, Nordstrom, Allergan, Accenture, Lockheed Martin, Samsung, IBM, Wells Fargo, MetLife, Delta Air Lines, Aetna, and Starz.

The researchers then used the Global Database of Events Language and Tone (GDELT), a news article database, to match sponsored content mentions of corporations and brands to articles matching the corporate or brand sponsor. In all, they found 2,707 articles related to the companies and brands sponsoring content.

Analysis details

The research assessed the relationship of corporate sponsorship to news coverage of the same company across time. The analysis evaluated whether publishers filtered and shaped their news accordingly to accommodate corporate sponsorship. This practice is known as agenda setting. It refers to how the news publishers can influence which issues become the focus of public attention. In the case of sponsored content, publishers can add news coverage of a company and brand or reduce and cut their news coverage.

They divided the news articles into two segments for further analysis:

Elite publishers (NYT, WP, and WSJ), and
General (non-premium) news media landscape.

Omitting any seasonality mentions (i.e., earning calls), 20 of the 27 sponsored content companies showed at least one instance of agenda cutting or agenda building.

Further, of the 27 brands analyzed, only three companies showed an agenda-building effect among elite publishers: Huawei, Qualcomm, and Purdue Pharma. Amazeen and Vargo conclude that agenda building is a less likely occurrence with sponsored content companies or brands.

In addition, seven brands showed significant agenda-cutting effects among premium publishers: Netflix, Nordstrom, Starz, Wells Fargo, Aetna, Oracle, and Qualcomm. The researchers also found a significantly higher agenda-cutting effects across the entire U.S. media landscape — 14 companies and brands.

Amazeen and Vargo acknowledge that the news media is not immune to internal and external forces in their newsrooms. Publishers often set guidelines for creative and narrative executions in content studios. Amazeen and Vargo suggest publishers monitor and develop measures to assess the additional news coverage or lack of for companies and brands of sponsored content.

Industry-Research

Getting consumers to trust quality information is critical

February 7, 2022 Rande Price, Research VP – DCN

A trusted reputation is crucial for publishers. And, despite the clickbait appeal of fake news, most people value accuracy and truthful content. Research has confirmed time and again that people want to engage more with articles shared by trusted journalists and media outlets, especially on social media.

89% of Americans believe it is “very important” for a news outlet to be accurate and 86% that it is “very important” that they correct their mistakes (Knight Foundation, 2018),
85% say that accuracy is a critical reason for why they trust a news source (The Media Insight Project, 2016).
63% of Americans say they have stopped getting news from an outlet in response to fake news.

However, fake news and low-quality content are still prevalent, amplified, and generating tremendous engagement. Misinformation is not limited by reality and often feeds natural individual biases.

Fighting fake news

The question remains where do publishers place their efforts in the fight against fake news? New research from Alberto Acerbi, Sacha Altay, and Hugo Mercier, Fighting misinformation or fighting for information? explores whether publishers should fight the spread of misinformation or support the trust in reliable sources. Interestingly, the researchers found that it is just as likely that consumers will accept articles and sound bites of fake news reporting as it is for them to reject a piece of accurate news reporting.

The authors developed a model that estimates the effectiveness of increasing the acceptance of reliable news compared to decreasing the acceptance of misinformation. The model includes two main parameters: the share of misinformation compared to the share of reliable information and the tendency for individuals to accept each type of information.

Reliable information refers to news shared by sources that, most of the time, report news accurately,
Misinformation refers to news shared by sources that regularly share fake and deceptive information.

The model provides a baseline view of the informational environment and offers an approximate index of its quality. Using these broad definitions, the model design includes 5% of misinformation as people’s news diets, with the remaining 95% consisting of information from reliable sources. Importantly the model captures the main elements of an informative environment: the incidence of reliable information compared to misinformation and the tendency to accept each type of information.

The model computes a global information score. The calculation represents the share of accepted pieces of reliable information minus the share of accepted pieces of misinformation.

Simulated exposure

A small sample of individuals simulated in the model were exposed to both reliable and fake news. A larger sample of individuals simulated were exposed only to reliable news. The researchers tested different intervention rates of reducing the acceptance rate of misinformation compared to increasing the acceptance of reliable information.

The researchers analyzed the different interventions rates. The basic simulation illustrates that, even with a 10% incidence of misinformation, improving the acceptance of reliable information by 3% points is more effective than bringing acceptance of misinformation to zero. Therefore, interventions that increase the acceptance of reliable information have a greater effect than interventions on misinformation.

Acerbi, Altay, and Mercier demonstrate the importance understanding the impact of different interventions in the informational landscape. Publishers that place their efforts on increasing the acceptance of reliable information will have a greater effect in the fight against fake news.

These findings do not dispute the many efforts to fight misinformation. However, given publishers’ limited resources, more efforts should be dedicated to increasing trust in reliable sources of information rather than in fighting misinformation.

Industry-Research

How video streaming services innovate and stay competitive

January 26, 2022 Rande Price, Research VP – DCN

Streaming is popular but competition is fierce. It seems like every major network and media company has launched a streaming service.

Last week, Netflix released its 4Q 2021 earnings. The company closed the year with 221.8 million subscribers. However, Netflix fell short of its Q4 new subscriber forecast. Pivotal Research Group analyst Jeff Wlodarczak comments that streaming services are adjusting to the new norm of subscription growth compared to the accelerated sign-ups witnessed during 2020’s lockdown. Wlodarczak believes, “Streaming is not over; it is the future.”

A number of industry analysts have identified strategies and offer insight into the streaming marketplace’s next steps.

International growth

MarketWatch points to global programming investment as a top priority for streaming services. And the investment in content only bears this out.

Netflix’s hit series from South Korea, Squid Game, is one of many international success stories and a clear winner for the platform. Expect more foreign-language series to be developed as Netflix turns international growth, especially in Asia, India and Latin America.
Amazon’s Prime Video will offer more programming in India’s Hindi, Tamil, and Telugu languages. It’s India service registered tripled its viewing hours over the past two years there.
Apple TV+ will debut its first Russian-language show, the thriller “Container,” in the spring.
Disney+ plans 50 Asian originals by 2023, as it expands to South Korea, Hong Kong, and Taiwan.
HBO Max debuts in Europe in early 2022.
Paramount+ also debuts in South Korea and Western Europe.
Peacock expanded to Europe (on Sky platforms), with more than 50 Spanish-language projects with Telemundo.

Mix and matching viewing strategies

While Linear TV marathons introduced us to binge viewing, Netflix’s flexible nature made it an everyday behavior. TheRinger identifies the different episode distribution strategies to keep viewers engaged and coming back to view more. As noted with Netflix, flexibility is essential and a reminder that different approaches offer different results. A buzz-worthy binge (all episodes released at once) can be great PR for a new series release. Additionally, a scheduled infusion of new episodes can draws viewers back week after week.

Apple TV+ offers a “demi-binge” strategy, debuting with a batch of three episodes, then airing the remaining seven one at a time.

WarnerMedia’s HBO Max uses a hybrid approach, breaking up seasons into packs of two or three episodes released over several weeks.

Interestingly, Peacock’s promotes binging but at higher pricing for specific series. Seasons 1 and 2 of The Office are available at the lowest-priced monthly subscription price of $4.99 a month. To unlock every episode, extended cuts, never-before-seen-footage, and watch commercial-free, consumers pay $9.99 — the highest tier.

Amazon’s The Marvelous Mrs. Maisel will switch from releasing all eight episodes at once to two a week for four weeks. Fear not, the binging release strategy is far from over. Rather, this is simply different viewing models in play. And they are not necessarily mutually exclusive.

Merger, acquisitions, and differentiation

As Netflix invests in gaming, Amazon looks to its NFL and Thursday Night Football. Both are clear points of differentiation. Other services look to corporate and sibling-studio deals to offer HBO Max, Peacock, and Paramount+ access to new movies releases 45 days after they open in theaters.

CNBC Tech Reporter Alex Sherman points to the significance of mergers. He believes that Paramount+ and Peacock won’t last as standalone streaming services, and a merger is likely in their future.

Discovery Inc.’s acquisition of WarnerMedia (expected to be complete in mid-2022) will combine the streaming platform of Discovery+ and HBO Max. Combined, they will have approximately 100 million subscribers.

Streaming platforms are making significant investments in new and innovative content and unique deal-making to differentiate themselves from competitors. They need to keep their customers consistently engaged, especially as consumers begin to reevaluate their multiple subscriptions to access the content they want to watch.

Industry-Research | Revenue

Publishers focus on scalability and audience growth for 2022

January 18, 2022 Rande Price, Research VP – DCN

Most digital news publishers registered growth in subscription and advertising revenues in 2021 as compared to the prior year. And, according to Reuters’ Journalism, media, and technology trends and predictions 2022, close to three-quarters of publishers (73%) are optimistic about this year. To understand future trends in news publishing, Reuters surveyed 246 executives in 52 countries during November and December 2021. The participants were senior-level employees in digital media strategies at news publishers.

Building scale

As publishers look to the future, scale is essential for most. These companies see a future with a mix of models to grow revenue including subscription, advertising, ecommerce, and events.

Pure plays look to scale: Digital publishers are acquiring and merging to give them more leverage with advertisers and to compete with the dominant tech players of Facebook and Google. Buzzfeed’s purchase of Complex and Vox’s acquisition of Group Nine are recent examples of this strategy. Publishers expect more mergers and acquisitions in 2022.
Traditional media looks to digital acquisitions to drive growth: Large traditional media players have focused on the acquisition of digital brands to add value to their subscription bundles and target a growing digital audience. Axel Springer’s purchase of Politico and the New York Times’ plan to buy subscription-based sports site, The Athletic, are two prime examples. These acquisitions are solid plays to drive audience growth with digital audiences.
New models fuel local start-ups: At a local level, low-cost reader-focused start-ups are using newsletter platforms like Substack to attract audiences. Digital newsletter companies are also building local footprints. For example, Axios is expanding its newsletter-led model to 25 cities this year.

Audience strategies and innovation

Publisher efforts this year focus on podcasts and other digital audio (80%), building and improving newsletters (70%), and developing digital video formats (63%). Publishers are focusing on new audio formats such as audio articles, flash briefings, audio messages, and live formats such as social audio.

New audio initiatives (e.g., Clubhouse, Twitter Spaces, Facebook’s Live Audio Rooms, Reddit Talk) show audience interest in audio discussions. However, executives are unsure how engaged audiences are long-term in these pop-up, discussion-based experiences. More content also means more competition and a need for more content moderation.

Still, publishers see audio as strategically important. It can deliver reach, loyalty, and revenue. Some publishers want to own the audio experience to control the full customer experience. The New York Times purchased Audm, an audio narration app, and they plan to launch a listening product this year.

Publishers also want to engage with younger audiences. They have a renewed interest in short-form video and look to native video formats to attract Gen Z. They are also using third-party mobile-friendly online video platforms to target Gen Z. Executives report that more effort is going to visual distribution and engagement platforms like Instagram (net score of +54), TikTok (+44), and YouTube (+43), and less effort into general-purpose networks like Twitter (-5) and Facebook (-8). Even with a renewed video interest, many news publishers still question the monetization strategy of short-form social video.

News publishers need to develop deeper relationships with audiences. In particular, they must reengage the disaffected and target the young adults. This year, innovation is an important cornerstone to attract new readers, with publishers investing in new audio formats and short-form videos. Investment is essential to build the future Web 3.0 experience.

two cranes in fog, one more visible in foreground

Industry-Research

Strategies to help newsrooms build trust with audiences

January 12, 2022 Rande Price, Research VP – DCN

Trust is a crucial driver of consumer engagement, especially in news reporting. Ed Williams, the CEO, Edelman, UK, and Ireland, notes that trust closely correlates to our sense of happiness. “The amount of trust that people are able to place in the institutions that govern or inform their lives accords closely with their sense of happiness,” he elaborates. “So, in a broad, societal sense, it matters whether or not our media is trusted.”

Unfortunately, recent studies show trust in the news media continues to decline. Edelman’s Trust Barometer 2021 shows trust in all news sources is at a record low with social media (35%), owned media (41%), and traditional media (53%). Gallup research finds trust in the news media news at 36%, down four percentage points from 2020.

In a new report, The Reuters Institute’s lead researchers take a deeper dive into the questions of trust in the news media. Specifically, Reuters explores how the news media can build trust with its audience. The report showcases discussions with 54 individuals from a mix of small, local, and niche online publications to large, industry-leading brands in the US, UK, Brazil, and India.

Concerns in the newsroom

The report details journalists’ frustration with their newsrooms’ inabilities to build trust with the public. Smaller media organizations also spoke about their concerns and their lack of control over the way audiences interacted with their brands.

They also view Facebook, Twitter, Google, WhatsApp, and YouTube negatively and believe these platforms cause increasing distrust in the news media.

Breadth and depth face fierce competition

Journalists believe the quality and depth of their reporting are the main reasons audiences trust their news organization. However, many news media companies look to social platforms for scale. Doing so often adds attention-grabbing headlines and a disconnect with the content.

Rohan Venkat, Deputy Editor at Scroll (India) responds, ‘It’s something that we find quite hard, and we have to keep innovating in trying to convey that the format, the medium, is more complex than just what the headline contains.” Many journalists are less interested in chasing after reach and scale on platforms and want to build a strong relationship with their audience.

Finding your audience

Maintaining a strong connection with loyal readers is a priority for most newsrooms. However, publishers often disregard harder-to-reach and wary audiences. It doesn’t help that there are few incentives to build trust with an uninterested – and sometimes antagonistic – audience.

Many journalists feel it may be easier for publishers to change the minds of readers resembling their audience. However, if those most critical of the news media and its journalists are left untouched, they will continue to spread distrust in media news.

The research participants identified strategies to help build trust with audiences. The strategies include:

Maintaining a focus on accuracy. Differentiating fact from opinion is critical in building and keeping audience trust. News publishers should use fact-checking as a key differentiator.
Using editorial initiatives to cater to audiences who are underserved, overlooked, or criticized by the press.
Ensuring transparency about reporting practices, editorial stance, and journalists’ backgrounds. Disclosing the identities of those producing the news can also help.
Engaging in partnerships with other news or civic organizations. Offering practical advice to an audience centered around consumer products, recipes, and other information relevant to daily life.

Journalists and news publishers are finding ways to stand out and engage audiences. Creating, experimenting, and analyzing content in different formats, such as audio, visual, and text can offer insight into the impact on trust and distrust. Notably, the publishers need to incentivize the content most likely to build trust with audiences.

Industry-Research

Finding success in 2022’s competitive streaming market

December 15, 2021 Rande Price, Research VP – DCN

The pandemic influenced business and consumer ecosystems worldwide. New behaviors include wide spread adoption of cashless transactions, contactless shopping, Zoom calls, and virtual conferences. Today’s world differs significantly from the pre-pandemic norms of 2019. Deloitte’s new Technology, Media & Telecommunications (TMT) Report looks at our transformed landscape and offers insight into consumers’ TV viewing habits and video consumption and predictions for 2022.

TV evolves

While overall television viewing increased during the pandemic, that growth did not occur on linear TV. Deloitte’s report sees this year’s impact on TV broadcast as a tipping point. It attributes this to the changing television landscape to new platforms and rich content. The report cites declines in the U.K. and forecasts further decreases in 2022 across TV broadcast live, time-shifted, and on-demand. In all, the share of viewing in the U.K. for TV broadcasters will account for only 50% of video viewing on all screens.

As a result of declining viewership, broadcasters and cable networks are launching streaming businesses (i.e., Discovery+, Disney+, and Paramount+) to add reach and compete for viewers’ attention. Approximately 80% of U.S. households now have a paid streaming video-on-demand (SVOD)subscription, with roughly a 35% churn rate this year. Deloitte expects the younger European SVOD market to replicate the US model.

Managing SVOD

Consumers are price-sensitive and likely to find less expensive ad-supported offerings to manage their wallets. Deloitte estimates that at least 150 million paid subscriptions to SVOD services will cancel worldwide. However, Deloitte forecasts that consumers will add more subscriptions than cancel in markets with high churn. In fact, the average number of subscriptions per person will increase. Deloitte sees churn rates at 30% in the U.S. for 2022 compared to 35% in 2021.

Attracting and retaining audiences

Deloitte forewarns publishers that content development and acquisition costs are likely to increase. Therefore, the pressure to attract and retain audiences is a top priority. Their recommendations include:

Multiple tier offerings

Multiple pricing tiers will help protect against churn. Asia/Pacific offers multiple tiers from free, ad-supported video-on-demand (AVOD) to premium. They also provide service bundles with video, gaming, and music. Bundling different services allow providers to aggregate large audiences for advertising and helps prevent churn. Deloitte expects to see more multiple-tier and bundled offerings in the U.S. and European markets.

Partnerships

Partnering with telecom and cable TV operators offers access a sizeable mobile market. Partnerships can help SVOD providers with distribution, customer costs and offers a compelling bundled choice. Partnering with studios can help manage content development and attract a broader audience.

Better data usage

Use data to understand a customer’s lifetime value can develop more enduring relationships, especially with more-profitable age groups. Identify and track customer segments to create compelling content personalization, acquisition, and retention tactics. Establish a strong understanding of price sensitivity and content preference to find valuable subscriber segments.

Learn from the experts

Telcom and MVPDs spend years learning and managing churn. Leverage and learn from their expertise in maximizing customer lifetime value.

Manage a positive experience

Publisher SVOD services must deliver a valuable and positive user experience. It’s crucial to offer a good user experience from sign-up to cancellation.

Deloitte also reminds publishers to be flexible, be the prized alternative to the constraints of cable subscriptions and pay-TV. Churn is inevitable but controllable as competition grows in the marketplace.

Industry-Research

Evaluating audience engagement post-pandemic

December 8, 2021 Rande Price, Research VP – DCN

The Covid-19 pandemic drove a surge in digital media usage. However, as consumers slowly return to work and to everyday life outside the home, digital media consumption been impacted. New research from GWI, Connecting the Dots, finds that the gradual shift to our pre-pandemic habits has downshifted digital consumption.

However, GWI sees the present as an interim period. For now, it remains unclear whether consumers will return to their previous content consumption levels — or perhaps reach new heights. This report offers an early look at consumer’s media behavior and attitudes as they slowly resume post-pandemic life.

Consumer attention serves as a commodity in today’s media marketplace. The attention metric took on new importance during the pandemic. Marketers and advertisers seek digital properties that offer large viewer and reader data that exhibit high levels of time spent. However, the attention economy concept as currency is only part of the advertising equation. GWI believes understanding consumer attitudes and feelings is a necessary part of the calculation and offers insight into their behavior.

Multiple streaming services add up

Television consumption increased during the pandemic and so did consumer spending on subscription services. Though GWI’s research finds that some consumers think they spent too much money. Over one-third (34%) of consumers state that TV services are too expensive in Q2 2021 compared to 27% in Q2 2020, an increase of 26%. In addition, in May 2021, a quarter of consumers were thinking of canceling or already canceling a streaming service.

Gaming grabs consumer attention

The pandemic ignited a period of exceptional growth for gaming. GWI cites a Google Trends’ analysis that compares the popularity of video gaming to a TV program, a theatrical release, and a new album release. The analysis tracks the popularity of Animal Crossing, a social simulation video game series, Tiger King, a popular Netflix program, Tenet, a new movie release, and Folklore, Taylor Swift’s album release — from January 5, 2020 to September 27, 2020. Tiger King, Tenet, and Folklore each had short-lived peaks, while the popularity of Animal Crossings, after an initial peak, maintains relatively steady interest.

Gaming is a strong contender for consumer attention, especially among Generation Z. According to GWI’s survey in Q2 2021, more than half (54%) of Zers are interested in gaming compared to 42% in Q2 2020. In contrast, Gen Z’s interest in television declined from 44% in Q2 2020 to 42% in Q2 2021.

Audio is screen-free

GWI’s report also shows audio entertainment, including streaming music and podcasts, is an integral part of consumers’ lives, especially when at home and during exercising. Interestingly, based on Q2 2021 data, streaming music is the only media type outperforming its Covid peaks that took place during lockdown.

GWI suggests that one of the reasons for audio’s success is that it doesn’t compete for screen time. Audio streaming offers an escape from screen fatigue. Using different screens all day may boost usage of audio media at the expense of visual media platforms.

Attention retention

As out-of-home activities become the norm once again, media channels need to think about re-engaging consumers. Transitioning from a pandemic mindset to a new normal is not easy for anyone. Media companies need to rethink their success and sales metrics and move beyond consumer attention. Offering quality content, positive experiences, a relatable community, opportunities of fandom, and possibilities of escapism, can present new opportunities of engagement.

Industry-Research

Track reader regularity rates to optimize subscription success

November 24, 2021 Rande Price, Research VP – DCN

Reader-revenue strategies offer publishers a recurring revenue stream and positive audience relationships. A strong subscription business requires measuring and monitoring the core metrics of consumer engagement. More than likes and clicks, though, true subscriber engagement is characterized by regular usage. The Medill index developed by the Medill Spiegel Research Center provides insights to identify this important metric of at-risk subscribers for local news outlets.

The research includes data from close to 50 news outlets. On average, across all publications, 95% of subscribers pay for their subscriptions each month. However, they do not visit the sites that they subscribe to daily. And that could spell trouble.

Know your readers

The Medill’s subscriber index segments readers into three tiers based on outlet size to identify at-risk subscribers.

Tier 1, large newsrooms, shows a monthly retention rate of 95.4% and visit an average of 5.7 days per month.
Tier 2, mid-sized newsrooms, shows monthly retention at 95.7% and visit an average of 9.2 days per month.
Tier 3, small newsrooms, shows monthly retention at 96.2% and visit an average of 10.5 days per month.

Subscribers in smaller communities tend to look at their local news organizations for multiple purposes. These include local news events and sports sports, as well as national and international news. In contrast, many readers of medium and large newsrooms turn to secondary sources for national and international news.

Deep dive into audience analyses

The Medill index tracks both subscribers and registered non-subscribers to assesses whether they are “at-risk” or “established” based on their regularity. “At-risk” is defined as two or fewer visits per month, while “established” means more than two visits. The research concludes that regular visits to a website is more important for retention than the number of stories subscribers read. Building toward habits of daily usage is a necessary retention metric.

Engaging with at-risk subscribers is vital to keeping retention high. Tim Franklin, Senior Associate Dean and John M. Mutz Chair in Local News at Northwestern’s Medill School of Journalism, suggests getting subscribers engaged through regular communications. This connection point can be a newsletter, a news alert, an email from the editor or the publisher, or even emails about events. Reader retention needs to be a central focus and play a prominent role in a publisher’s strategy.

Experiment to engage

In addition, experimentation is essential to evaluate the effect of different pricing offers on churn. Lenfest’s Herts, a former Finance VP of the Dow Jones Consumer Media Group, recounts an experiment at a major metro news outlet. They offered an introductory price of $1 for six-month access. A higher number of sign-ups for the long-term introductory offer resulted in more total subscribers after one year than previous short-term offers.

Understanding cross-platform consumption is also crucial in understanding the total engagement picture. How often a reader engages in the site, app, newsletter, comments, etc., all represent an integration into the reader’s lifestyle experience. The publisher’s goal is to make its product a constant touchpoint and — as such — valuable to the subscriber.

Identifying and engaging with at-risk subscribers is necessary for reader retention. The Medill Index demonstrates the importance of publisher attention to reader regularity to build a long-term relationship with a core cohort of paying subscribers

Advertising | Industry-Research

Surveillance advertising isn’t just problematic, it eats publisher profits

November 16, 2021 Rande Price, Research VP – DCN

Tracking and profiling remain standard practices and big business for ad-tech firms in digital advertising, though publishers don’t see much of the money. A new report, Sustainable without surveillance, from the Irish Council for Civil Liberties (ICCL), reviews the practices of tracking-based advertising and its impact on the digital ecosystem.

The report, written by Dr. Johnny Ryan, highlights how tracking-based advertising diverts data and revenue from publishers to ad tech intermediaries, notably Facebook and Google. In addition, Dr. Ryan shares results from European publishers when they turn off tracking-based advertising.

Tracking-based advertising devalues publishers’ audiences

The report outlines how real-time bidding (RTB) and auction-based environments allow thousands of companies to receive profile data about a person from a single ad. Tracking-based advertising diverts data and revenue from publishers to ad tech and, as a result, turns publishers’ audiences into commodities. Advertisers can now buy a premium publisher’s audience cheaply on low-value sites.

The research also recounts how tracking-based ads make ad fraud easier and how they trick advertisers and ad networks into paying them. Early estimates of ad fraud by HUMAN (formally White Ops) found Russian cybercriminals used Methbot to extract $3 to $5 million in video ad revenue from premium publishers. Methbots created fake pages on which they run real ads from actual advertisers. The bots simulated human activity (i.e., cursor movements and clicks) to mimic human action to make it appear as if a human impression occurred. HUMAN identified over 250,000 URLs that Methbots generated across more than 6,000 publishers.

Dr. Ryan also cites the 2016 Guardian study that used tracking-based ads to buy sales inventory in their newspaper. A detailed analysis of this media transaction found that for every ad dollar spent programmatically on the Guardian, they received only 30 cents. Intermediary technology firms executing tracking-based advertising received the remaining 70 cents. Each ad tech firm taking part in the transaction collects a fee, often hidden.

Publishers profitable without tracking-based advertising

The report presents evidence from European publishers that have profitable advertising businesses that do not rely on tracking-based advertising.

When Dutch publishers NPO Group replaced tracking-based ads with contextual-based ads, their advertising revenue increased 149%. Revenue continued to grow even with Covid-19’s significant impact on advertising spending.

The Norwegian news publishing group earned an average of 391% more over 12 months for contextual ads than tracking-based ads for websites it operates.
Further, TV2, a primary Norwegian news website, earned a 210% higher average price for contextual targeting than competing tracking-based ad targeting.

Time for change

It’s time for publishers to rethink their involvement in tracking-based advertising. With little potential for substantive yield, publishers must calculate the risk of data leakage and fraud. Supporting Dr. Ryan’s analysis is the U.S. based report, Online Tracking and Publishers’ Revenues: An Empirical, from lead researcher Alessandro Acquisti. It found that tracking-based advertising earns publishers only 4% more revenue than context-based advertising. It is clear that data tracking underpins the digital media economy and there are far more profitable, and less problematic, solutions.