COVID-19 Response - Entertainment Brands
The COVID-19 pandemic has engendered changes to the frequency, consumption time, demographic and post pandemic intentions of consumers. From an entertainment industry perspective, brands have adjusted or created messaging regarding the pandemic, and have created or adapted products for use during the pandemic. This has been done to respond to a changing entertainment landscape wrought by demand changes for content, lowered estimates for ad revenue, and business model requirements.
Changing Consumer Behavior
Differing rates of increased usage by different generations, a survey of plans to continue increased viewership, revert to previous usage, or use streaming services less are among the insights provided into changes to consumer behavior when seeking entertainment sources.
- Globally, internet traffic surged 30% in March 2020, as persons used the internet as a vehicle for entertainment while stay at home orders were in effect. The entertainment, games, TV, movies, music, and book sector averaged an increase of 70% generally, with music specifically experiencing a five fold increase.
- Outbrain, a provider of retention, audience acquisition, and engagement services for media and publishing companies covering one third of the connected population, advised of week on week growth by 13% globally, and 18% in the US in mid-March. This change can be attributable to the 49% of consumers who were spending more time streaming TV and movies, as 46% did not indicate a change in online behavior, and only 5% reported less time spent online.
- During this time 15% of web traffic was focused on COVID-19 coverage as four out of every ten consumers increased the frequency with which they accessed the news. An increase of 16.8% in visits to media sites fed a concurrent increase in time spent on sites by 22.1%. The surge in traffic focused on premium content, as premium publishers experienced growth at twice the rate of other publishers.
- Total streaming time moved from 127.6 billion minutes during the last week of February 2020, to 156.1 billion minutes during the week of 9 March to 16 March 2020. Streaming consumed 23% of consumer TV viewing time in March, compared to 21% in February, and 14% one year ago. In the last week of March 2020, streaming increased by 8%.
- Consumers are spending more time streaming TV and movies (49%), calling or video chatting with friends or family (48%), using social media (45%), playing video games (32%), shopping online for non-necessities (26%), ordering groceries online or via an app (25%), ordering food delivery online or via an app (23%), taking classes online (15%), and ordering medication online (13%). Streaming minutes was divided between Netflix (29%), YouTube (20%), Hulu (10%), Amazon (9%), and other platforms (31%).
- CEO of Akamai Technologies, Tom Leighton, expects the increase to be a permanent one and for usage of social media and streaming to be its highest, even after the stay at home orders have been removed.
Behavior by Demographics
- Women are spending more time on social media. Persons with higher education levels are also spending more time streaming TV and movies, calling or video chatting, and shopping online, but less time playing video games. Persons with higher incomes are spending more time streaming TV or movies, video chatting, on social media, and shopping online.
- Gen Z has the highest increase in the use of streaming services with 66%, followed by Millennials with 56%, Gen X with 53%, and Boomers with 39%. Urban and suburban communities have increased usage by 54% and 50% respectively, while usage in rural areas has also increased by 44%.
- With respect to income and education level, post graduates has increased usage the most with 55%, but they are closely followed by holders of bachelor's degrees with 54%, and persons still in college with 47%. Persons earning more than $100,000 annually lead the income groups with increased usage with 57%, while persons earning between $50,000 and $100,000 report a 54% increase compared to a 45% increase for persons earning less than $50,000.
- Morning Consult expects the increased usage to be short-lived as 51% of adults who are streaming more during the stay at home orders, expect to revert to pre-pandemic level. Nevertheless, 21% of adults surveyed have subscribed to a new streaming service, of which, 29% belong to Gen Z, 32% are millennials, 19% are from Gen X, and 13 % are Boomers.
- Hispanics are by far the majority in subscribing to new streaming services with 34%, while African Americans account for 23%, White Americans for 25%, and others with 20%. New subscribers from the west lead with 24%, followed by the south with 22%, the mid-west with 19%, and the northeast with 18%.
- The top five beneficiaries of the new subscribers are Netflix (47%), Disney+ (34%), Hulu (30%), Amazon Prime Video (23%), and YouTube TV (15%). Streaming services with less new subscriptions have seen increases in persons accessing free trials offered. Other streaming services saw a 60% increase in usage of free trials. Services falling in this category include ESPN+, Apple TV+, Showtime Now, CBS All Access, Sundance Now, Quibi, and YouTube TV
- After the pandemic, 24% of persons intend to spend more time on social media and 29% streaming TV and movies, while 51% of persons do not expect a significant change in their use of social media or streaming activities.
- Regarding streaming TV and movies, 6% of adults view this as their only option at the moment, 23% have made it their choice for the present, 68% have always streamed, while 18% intend to stream less, 51% about the same, and 29% more. Likewise, for social media, 6% view the increased activity as the only option during the pandemic, 21% have chosen to use the platforms during the pandemic, and 71% have always used social media. Post-pandemic, 21% intend to decrease usage, 24% intend to increase usage, and 51% expect usage to be about the same.
- When asked about usage behavior when stay at home and social distancing measures are suspended, persons indicate that they will increase usage for Netflix (48%), Disney+ (39%), Hulu (40%), Amazon Prime Video (39%), YouTube TV (40%), HBO Now (37%), and Apple TV+ (45%). Smaller streaming brands will lose the most new users with HBO Now standing to lose up to 21% of new viewers, YouTube TV will lose 19%, Apple TV+ 16%, and Amazon Prime Video 11%.
- Chief Technology Strategist at Wedbush, Brad Gastwirth expects that there won't be large numbers of cancellations because the price point for most subscription services is affordable. Bruce Leichtman, principal analyst at Leichtman Research Group, expects attrition as where there are no barriers to entry, there will be no "barrier to exit." Previously, 32% of free streaming trials have resulted in paid subscriptions.
Changing Entertainment Landscape
Content preferences, constricted ad revenue, and different business models are among the key features of a changing entertainment landscape.
- Content preferences has changed significantly during the pandemic.
- Sub-genres experiencing positive demand changes in descending order are fantasy drama, school age, teen sitcom, thriller, sci-fi drama, apocalyptic drama, mockumentary, sports documentary, historical drama, and cartoons.
- Sub-genres experiencing negative demand changes in ascending order are family reality, adventure reality, cooking reality, talk shows, comedy reality, superhero series, sketch comedy, romance reality, and late night talk show.
- Reasons advanced for the positive changes include families being at home together driving the demand for family content, and while removal from what is happening regarding the virus is driving demand for escapist programming, audiences are also turning to programming that is darker in tone as a way of accepting the uncertain environment, and families as a collective are turning to the familiar as they embrace older favorites.
- Negative changes to demand are attributed to disruptions in filming schedules as for talks shows and sketch comedies, while reality televisions has seen demand decline due to audience preferences for escapist programming.
- Deloitte acknowledges the changes in content, but cautions that increasing demand during the pandemic, when coupled with production stoppages may create a content crunch by September. The capacity and resilience of networks will continue to be placed under pressure due to increases in demand for content
Constricted Ad Revenue
- Ad revenue projections for 2020 were cut by Cowen and Co by $44 billion to $212 billion. This represents a 17% reduction from the original forecast of $256 billion and a year over year decline of 11%. The industries feeling the brunt of the impact are travel, retail, and auto.
- With respect to digital platforms, Lightshed analyst, Rich Greenfield, quoted in a Variety article noted that digital platforms will register the impact of declining ad revenues faster over television. Mr. Greenfield expects the impact to be felt more by television in the second quarter of 2020.
- A Bloomberg Opinion piece titled Streaming Services Face an Economic Reckoning After Covid-19, suggested that the entertainment industry should incorporate ads to retain low subscription fees. However, the intrusiveness of the ads has to be managed. Recently launched platform, Peacock offers tiered options to users tied to their tolerance levels for ads.
- Caught between being an ad revenue outlier such as Netflix, and offering a service with full on ads, the sector has seen media companies compromising between the two with purchases of Pluto TV and Tubi, both free, ad supported streaming services, by ViacomCBS Inc. and Fox Corp., respectively. Comcast assured the ad load on Peacock will be limited to 5 minutes per hour, while Hulu has experimented with ad display formats, for example, playing ads when a video is paused.
Changing Business Model
- Bloomberg also advises entertainment brands to reintroduce content and internet bundling, and to incorporate mechanisms that will promote social community into the streaming platforms.
- The shift to content and internet bundling is proposed to manage convenience and cost issues for consumers as they adjust to reduced earnings and myriad choices in an increasingly complex streaming market. Guy Marion, adviser on customer retention at Brightback, notes that structured bundles, coupled with dynamic cancellation and billing processes, can help with lowering churn.
- Content bundling will help Disney+ offer programming beyond children's animated features and superhero shows through a bundle with Hulu priced at $13 a month. AT&T proposes to bundle HBO Max as a free option for wireless customers. This would be a similar set up as done by NBC Universal for Peacock on Comcast.
- Deloitte expects renewed M&A activity as capital flush companies seek to acquire innovative start-ups facing liquidity challenges, valuation dips, reduced funding, hiring freezes and layoffs. Executive focus should be on maintaining a positive consumer experience, creating new and engaging content, leveraging automation, and differentiating despite collaborations from alliances and partnerships.
- Netflix's Party Chrome Extension is one example of how a social connection can assist platforms in engendering a social connection. Streaming platforms are advised to create mechanisms where users can experience services collectively in real time. The lack of this facility was shown clearly during the stay at home orders as users resorted to watching their favorite shows "together" via video chat. Anecdotal evidence is borne out by the results of a study published in the International Journal of Information Management that revealed that social features contributed to increases in app spending and user interest.
- Immediate and short and medium term changes wrought on the entertainment industry by COVID-19 warrant awareness of the brand and business implications for entertainment brands.
- Brand messaging post COVID-19 must be crafted to create new positive associations, and stickiness with customers to mitigate the negative connotations which may be placed on the activities indulged in during the pandemic. Defensive thinking must also be employed by brands to head off post-pandemic attractiveness of new activities discovered during the stay at home phase as well as those that represent the return of choice and exploration.
- Brands are advised to structure product design and messaging to recognize and provide options to alleviate or simplify the increased responsibilities placed on women post pandemic. Messaging urban customers ought to reference the freedom to explore out of home when out of home activities are allowed.
- Engagement and retention of high- and low- income consumers should be pursued using different strategies. Brands with higher engagement from high income persons during the pandemic should capitalize on the new audience without alienating the lower income users or be insensitive to the health related, financial, and emotional strain lower income persons face.
- During COVID-19 brands should focus on authenticity, revisit creative and messaging often to meet the demands of a rapidly changing market, consider segmentation to hone messaging strategy, use the media channels where consumer spend most of their time, and chose premium over non-premium inventory.
- Brands should avoid assuming that consumers are consuming the way they did historically, blanket restriction of ad placements, and sharing insensitive, or panic causing content.
Examples of Messaging
- Nickelodeon presented a Kids Together town hall special to assist children with understanding the changes brought about by COVID-19. Emphasis is placed on creating the right tone as the network sought to "strike a balance" between information and not instilling fear according to the Executive Vice President of Talent at Nickelodeon, Paula Kaplan.
- Disney consulted with a specialist in media, education, and child psychology to create COVID-19 related messaging with actors from its shows for airing in breaks between programming. The interstitial messages premiered on March 27 on the Disney Channel and on YouTube.
- Sesame Workshop produced a series of animated messaging titled "Caring for Each Other" for distributions with its partners, HBO, the Ad Council, PBS KIDS and local PBS stations, YouTube, and Univision. Child friendly explanations and coping strategies are available on SesameStreet.org/caring.
- Audience reviews of the messaging was positive. One parent said that Nickelodeon's #KidsTogether event helped her daughter to better understand what was going on with the pandemic. Users on Twitter expressed support for the Sesame Street campaign. There was no information available for the Disney messaging on the social media sites reviewed.
Partnerships and Content Availability
- Brands also offer free content and have partnered with non-profit organizations during COVID-19.
- Brands that have partnered with nonprofit organizations include Netflix, MTV, Comedy Central, ViacomCBS Entertainment, the Games industry, and the recording academy. Netflix is partnering with non-profits to provide emergency relief to out-of-work crew, with the SAG-AFTRA COVID-19 Disaster Fund, the Motion Picture & Television Fund, and the Actors Fund Emergency Assistance.
- MTV, Comedy Central, and ViacomCBS Entertainment has partnered with the Ad Council on the #AloneTogether Campaign focusing on mental health issues. Alone Together is a website providing resources to help people stay active, connected, and focused during the pandemic as ways to keep mental health issues at bay.
- The Games industry is working with the World Health Organization on the #PlayApartTogether Campaign. Messages from the WHO targeted at helping to slow the spread of COVID-19 will be played in games or be disseminated through special events, exclusives, activities, rewards, and inspiration. A list of the games participating in the initiative can be found here.
- In the music industry the Recording Academy and MusiCares have each contributed initial donations of $1 million each to assist people in the music industry impacted by COVID-19.
- Free streaming is being offered by AMC Networks, Crackle, HBO Go/HBO Now, Hoopla, IMDb TV, Kanopy, Pluto TV, Popcornflix, The Roku Channel, Tubi, Vudu, YouTube, and Apply TV+.
- The Theater industry is also providing online in the form of stage shows, musicals, and opera. The list of available free shows can be accessed here.
- Although founded in 2018, Quibi launched its streaming service on 6 April, 2020. Quibi offers movie quality shows where the episodes run for ten minutes or fewer.
- Targeted at mobile users who are on the go, the service aims to meet the needs of consumers who have "in-between moments" of downtime. Content is presented as Movies in Chapters, short documentaries and unscripted series, and Daily Essentials, quick bite news and lifestyle programming.
- Pricing for the service is structured around a free trial period for 14 days and plans beginning at $4.99.
- Responding to queries about consumer adoption of a mobile streaming platform during the COVID-19 pandemic, CEO Ms Whitman expressed confidence that the brand would have a successful launch. In its first week, the service was downloaded 1.7 million times. This was subsequently updated to 2.7 million downloads after two weeks.
- On Twitter, the response has been mixed, with users expressing his disappointment, stating that Quibi is not going to happen, and others expressing their love for its programming.
- Peacock was launched on 15 April for Comcast cable customers, with a nationwide launch carded for 15 July. Original content and roll out plans, initially tied to NBC's coverage of the Tokyo Olympics, have been affected by the virus. Awareness of the brand by consumers was 28%.
- At present, Peacock is only available for streaming on Comcast platforms. Aside from Xfinity X1 cable customers, and Flex streaming customers, customers of Apple devices and the XBox One family of devices can also access the service.
- The product has three pricing tiers, the first is free, the second is $5 a month with ads, and the third is all-inclusive without ads costs $10 monthly. The free tier has 7500 hours of movies, TV classics, Hispanic programming, curated daily news, and the paid tiers offer 15,000 hours of content current Season TV. Available programming can be found here.
- A review of the NBCU Twitter profile and Instagram account did not provide any comment from users about the Peacock Platform,
- Given that it is as an ad-on service for Comcast customers, the timing of the launch during the pandemic was not a bad thing according to Bruce Leichtman of Lichtman Research Group.
Appointment Viewing — Live TV
Information regarding appointment viewing for live TV is provided on an overall basis, from a week on week perspective during the pandemic, a limited demographic profile, and industry analysts perspective.
- Comcast reports that total TV viewing time has increased across the board with Monday upending Saturday as the most popular viewing day in the 20 million homes the provider accesses. Media spikes are now being seen around 9pm instead of the usual commuting or meal hours in countries with strict stay at home policies.
- Overall weekday viewing has matched weekend levels with viewing between the hours of 11 pm and 2 am jumping 40% whereas between the hours of 6am and 8 am viewing time was reduced by 6%.
- The news is being accessed more frequently by four out of every ten persons, and Comcast reports further that news programming increased by 64% since early March with overall rates for 2020 so far increasing by 7% to 29% over the 22% recorded during 2019.
- Live TV viewing saw its biggest increase in the daytime period with an 8% surge, while overnight live TV viewing decreased by 13%.
Week on Week
- During the last week of March 2020, live TV viewing grew between 1% and 3%.
- For the week of 17-23 March, between 10am and 5pm streaming services benefited from a 39% increase over the previous week, while prime time viewing between 8pm and 11pm declined by 5%.
- Regarding local news, across all demos from early February to the week of March 9 viewership increased by 7%. Consumption of local news increased by 30.4% for persons over the age of 25, while ratings across local markets improved by between 3.5% and 12.5%.
- Daytime cable news experienced an increase of 347% year-on-year during the last week in march 2020. The rate of growth over total TV time during the same period was over 50%.
- Social media engagement for local news increased by 196% for Twitter, 62% on YouTube, 34% on Instagram, and 15% on Facebook.
- Viewership among persons older than 2 years increased by 7% between early February and the week of 9 March. The spike was higher for persons aged 25 to 54 at 10%, and for persons between 2 and 17 years, the lift was 20%.
- Regarding local news, viewership for persons over 2 years was 6.9%, persons 2 to 17 years was 20.4%, persons between 18 and 24 years 9.2%, persons 25 to 54 10.1%, and for persons over 55 it was 4.3%.
- In metropolitan areas hit earlier than other regions, increases in local TV viewing tracked the spread of the virus on the West Coast. For San Francisco the increase was 38.1%, Los Angeles it was 25.3%, for Sacramento the rate was 13.1%, and in Seattle 22.8%.
- For the 25 to 54 demographic, local news viewing moved from 25.7% in the week of 3 February to 30.4% during the week of 9 March. This compares to a shift from 11.8% to 14.4% for general drama, 4.7% to 6.5% for participation variety, and 4.4% to 5% for situation comedy.
Live TV vs Video — The Experts
- During it's Behind the Numbers podcast, eMarketer solicited the views of its internal analyst Ross Benes and forecasting analyst Eric Haggstrom to discuss Live TV and video streaming during COVID-19.
- Referring to a comment from the Poynter Institute, the point was made that the resurgence of live TV may continue towards the end of the year and into 2021 because of the presidential election, younger viewers newly introduced to live news sticking around, and COVID-19 continuing to be a topic of conversation.
- Mr. Haggstrom believes that the turn to Live TV is as a result of a combination of being cooped up inside and of wanting to get all the information they can get. He does not view the changes to be long term in impact. He considered the impact of the daily news briefings from the President, Governor Cuomo, and other officials on the figures for TV viewership.
- Mr. Benes noted that "artificially inflated numbers" will continue for as long as stay at home orders are in place and there is something that remains newsworthy for consumption from viewers. He expects news fatigue to set in at some point.