The movie industry has changed considerably since the moving-picture cinema was created in the 1880’s, as the work of a few inventors (including Thomas Edison) and technologies merged together to create something very similar to today’s theatrical movie business.
Few industries have been more devastated by the Covid-19 pandemic than the movie business. But it didn’t take a worldwide pandemic to challenge the theatrical movie industry which has been beaten down by the growth of at-home entertainment (both technology and programming), as well as the growth of interactive entertainment like mobile and video gaming.
One more indication of the changes in the movie industry today involve one of the great technology companies of the early 1900’s – Technicolor. This company was created in 1914 by two scientists in Boston who attended the Massachusetts Institute of Technology (hence the work “Techni” before “color”). Over the years, Technicolor came to dominate the technology used to produce movies in color. Now they have announced that they are selling their post production business. Other deals have also been made in the post-production area, such as Company 3’s sale to Framestore, a large visual effects and production company backed by China Cultural Investments Holding Companyof Shanghai, China.
This deal moves the Technicolor unit into a larger enterprise in the post-production world and, presumably, will provide added value to the buyer through consolidation and building scale by combining the companies.
Technicolor is probably best known for its work on seminal titles like The Wizard of Oz made in 1939. Technicolor will continue to be in “show-business” with its “visual effects and animation companies MPC, The Mill, Mr. X and Mikros Animation, which service film, TV, advertising, gaming and live events and are not part of the deal.”, according to The Hollywood Reporter. Technicolor also has businesses in the connected home arena, broadband technology, and set-top boxes.
Technicolor CEO Richard Moat said in a statement, that “The strategic sale of Technicolor Post is part of our long-term vision for Technicolor Production Services to focus on VFX and animation for the entertainment industry, and creative services and technologies for the advertising industry, which provide the maximum value to our clients.”
In an exclusive email interview, Bruce Hack, former Chairman of the Board of Technicolor and well-regarded media executive across traditional media and gaming. said to this author, “Technicolor is selling what is likely the least valuable portion of its creative services business, post production. It is retaining the more profitable and defensible activities, like premium film and TV production, where it holds a market leading position based on talent, technology and geographic leverage.”
Before the World Wide Web existed, there were encyclopedias for kids, students, teachers, parents and pretty much anyone looking for information, to go to find that information. But the Internet and the Web have changed almost everything about most of our lives – and finding information is no different. Today, Wikipedia is one of the most visited Websites in the World and will it turn 20 years old on January 15, 2021.
For millions of people, Wikipedia has changed how they learn, how they teach, how they parent, and, for some – how they “borrow” content for a school paper.
At its core, Wikipedia is an online encyclopedia, free to users, and supported by a non-profit foundation since its founding by Jimmy Wales and Larry Sanger. Wikipedia covers almost any topic you can imagine from Advarks and Abba, to the Zodiac and Zip Codes.
The content in Wikipedia is created in a collaborative manner, with the leadership of a large cadre of volunteer editors, who rely on an iterative process of posts and corrections, which is the simplest way to describe the nature of a “wiki” editing system. In the nomenclature of the Internet Industry, this is a “crowd-sourced” platform. Perhaps the best way to understand Wikipedia is to read about it…in Wikipedia!
Many teachers and professors have discouraged the use of Wikipedia, both due to plagiarism concerns as well as the questionable quality of some of the “facts” in Wikipedia. But other respected instructors think Wikipedia can be a good jumping off point for a student exploring a subject. For many people Wikipedia is the first stop when trying to learn something or settle an argument about a certain topic or fact. The coverage of Wikipedia is immense and is presented in over 300 languages
For frequently researched and discussed topics, Wikipedia is able to be highly reliable and accurate, because large numbers of readers and editors are constantly watching changes on Wikipedia articles and using the “wisdom of the crowd” to keep articles factual. As we have found with social media and other information outlets, the “truth” is often challenged, but it can also usually be verified. Wikipedia at 20 years old is an important information source for most people who are digitally connected.
This last year, while the world has been hunkered down under the strain of the Covid pandemic, a completely unrelated burst of stock investment activity has risen around gambling online in the U.S. There is a long and complicated history of online poker and online gambling in the U.S. But in the last few years, due to a major U.S. Supreme Court decision, the States have been allowed to legalize online sports gambling. Companies like DraftKings, FanDuel, Fox.Bet, Skillz and others have benefited from this trend.
Today another company expanded into sports gambling, when FuboTV, the live sports streaming platform, announced its intent to acquire sports betting tech company Vigtory. In the official press releaseit was indicated that FuboTV “expects to launch a sportsbook before the end of the year.” As a major sports media outlet, Fubo will be well positioned to promote their own sports betting product.
Forbes.com contributor, Beth Kindig, wrote a foresightful articlein December where she highlighted the attractive nature of FuboTV’s stock and wrote about the likelihood of Fubo moving into sports gambling. The stock has more than doubled since then.
Fubo’s press release said, “We believe online sports wagering is a highly complementary business to our sports-first live TV streaming platform”
Vigtory was founded in 2019 by Sam Rattner and backed by SeventySix Capital. Rattner is a well-regarded digital sports entrepreneur and SeventySix Capital is a successful investment firm with deep interests in sports and related fields.
Fubo shared more of their product plans in their press release:
“Additionally, FuboTV announced today more details of its online wagering strategy, further positioning itself to enter what Zion Market Research estimates will become a $155 billion industry by 2024. Through its December 2020 acquisition of Balto Sports and its content automation software, FuboTV intends to launch a free to play gaming experience this summer. Free to play gaming, which will be available to all consumers whether or not they are FuboTV subscribers, will first launch in a standalone app and later be integrated directly into the FuboTV user experience. By leveraging the Vigtory and Balto acquisitions, FuboTV intends to launch a sportsbook app where consumers can see current betting lines, place a variety of wagers, cash in their winnings and much more across sports they love. Finally, the company expects to integrate the sportsbook into FuboTV’s live TV streaming platform for a seamless viewing and wagering experience.”
FuboTV recently shared preliminary Q4 2020 results, indicating it will exceed 545,000 paid subscribers in 2020, a 72% increase year-over-year.
Viacom VIAB0.0%CBS VIAC-0.1% announced today a new distribution agreement that adds ViacomCBS content to Hulu’s live TV subscription streaming service, Hulu + Live TV. This distribution arrangement will cover a wide variety of content such as news, entertainment and sports. In all it represents content that will be seen over 14 new channels on the paid Hulu live TV service. This deal is just another example of media companies placing their content on as many possible platforms, and with as many possible business models, as they believe makes sense for their overall business.
The deal was described by ViacomCBS as a “multi-year deal” which includes continued carriage of CBS broadcast stations, CBS Sports Network, Pop TV, Smithsonian Channel, and The CW, as well as continued distribution of ViacomCBS’ premium subscription service, SHOWTIME®. The deal will also introduce fourteen additional ViacomCBS networks to Hulu + Live TV, including BET, Comedy Central, MTV, Nickelodeon, Paramount Network, VH1, CMT, Nick Jr., TV Land, BET Her, MTV2, NickToons, TeenNick and MTV Classic.
“We are excited to have reached an expanded agreement with Hulu that underscores the value of our powerful portfolio of brands to next-generation TV platforms and viewers,” said Ray Hopkins, President, U.S. Networks Distribution, ViacomCBS. “Hulu continues to be a great partner, and this agreement ensures that Hulu + Live TV subscribers are now able to enjoy the full breadth of our leading content across news, sports and entertainment for the first time.”
The CBS All Access service is generally seen as a successful paid VOD service for CBS. Plans have been announced to expand that service, and presumably substantial Viacom content will go on the new, expanded, ViacomCBS SVOD All Access service, which presumably was worked out with Hulu as part of the deal, though no such arrangements were announced at this time.
The merger of Viacom and CBS last year has brought together two companies which have had different approaches to digital distribution of their content. As TechCrunch points out: “Offering the ViacomCBS cable lineup to live TV streamers represents a different strategy than Viacom had in the past, before the 2019 merger with CBS. In previous years, it allowed a deal with YouTube to fall through, as well as those with other streamers, like the now shuttered PlayStation Vue. In the meantime, the company focused on more traditional carriage agreements with pay TV operators.”
As distributors take on new content, and new costs for their content, it is expected that pricing for various digital packages and alternatives to traditional TV will be changing. For instance, YouTube TV raised pricing by 30% in the middle of last year as it added more content from ViacomCBS channels.
ViacomCBS did not reveal the financial terms of this deal with Hulu. In November Hulu announced that the price for their Live TV service was going up to $65 per month.
When I made 12 predictions for 2020 on January 1, little did i know about Black Swan events, and I certainly didn’t expect one (by definition). I wrote these predictions for 2020 with no idea that we would spend most of the year in our homes away from work,
school, travel, etc. Now it is time to look at this coming year, 2021, knowing that major changes are underway in our society and economy, including those changes catalyzed by the pandemic and recession.
Some of the trends I have been writing about in general, and in my 2020 predictions, were clearly accelerated by the Covid pandemic. Overall most of my predictions were spot on. I evaluated those predictions a few days ago on Forbes.com and I got a solid B at 3.25 out of a 4-point scale. Feel free to read last years’ predictions and my self-evaluation.
OK, here goes for 2021:
1. Gaming will yield some of the most exciting IPOs of the year and I expect we will
see Roblox, Epic and Discord completing successful multi-billion dollar IPOs in 2021.
2. The growth of podcasting will continue strongly as this technology reaches more and more consumers with a wide variety of content, including emerging video-podcasts. Additional acquisitions will probably occur too, such as the likely purchase of Wondery by Amazon AMZN+0.7% announced today and reported in early December as a likely deal by Forbes.com.
3. The “creator economy” will prosper in 2021. New tools and platforms will enable more professionals, semi-pros, and amateurs to make successful apps, games, or other software using creator tools from companies like Unity, AppOnboard/Buildbox, Overwolf, Roblox, Manticore, as well as TikTok, Triller, YouTube, Snap and the many video-centric digital platforms. As has been seen on many of these platforms, people are finding new ways to make money (some even support themselves and their families fully) due to the creator economy.
4. Home voice platforms will move toward ubiquity in the U.S. and many more services, content, gaming and other features will be offered through voice platforms,
including services using artificial intelligence and machine learning which will advance the complexity and the quality of games, information services, interactive content, and social interactions.
5. Everybody coming out of high school and college wants to be a startup CEO. One well-known, venture capitalist, Peter Thiel, even supports a series of fellowship grants that encourage students to drop-out of college and start their own companies.
6. Disney+ is likely to be the big winner in terms of growth in SVOD services in 2021, but Netflix NFLX+0.3% will continue to grow, particularly internationally.
7. HBO and Warner Media/ATT T-1.3% have created a major disruption in Hollywood’s traditional show business by announcing all of the Warner Bros. films in 2021 will be released on HBO Max, simultaneous with in-theatre releases (to the extent theatres are open in various markets). This will put a big hole in the finances of traditional movie
theatres. The question is will it be a major driver for more HBO Max subscriptions? With the SVOD world full of powerful competitors like Netflix, Amazon, Hulu, Disney+, and others, this dramatic move may be just what is needed to give HBO a top slot in the SVOD industry. I believe other studios will follow suit and close or eliminate “the window” between theatrical releases and the ability to watch at home on a VOD service.
7. Snap will continue to dominate the social media usage of teens and young adults, but TikTok will also continue to grow strongly, probably at a faster rate than Snap. Both services play to the video-centric, user-generated interests of a wide range of kids and adults. YouTube may well start to feel the heat of these competitors.
8. Cord cutting will continue to grow as traditional cable/satellite subscriptions are replaced in many homes by skinny bundles, SVOD, AVOD, and other digital content. Companies like Comcast CMCSA+1.7%, Spectrum and others will need to figure out new ways to make money with consumers, as well as how to drive more revenue and profit in their Internet and TV businesses.
9. Mobile advertising revenue will grow considerably in 2021 as the demand
continues to increase from brands and products that want to reach the “mobile-first” power-users of smartphones, such as the Millennial and Gen Z populations. I expect to see a big increase in mobile advertising in gaming too, as the gaming companies seek additional revenue beyond the virtual goods sold in their “free to play” games.
10. Gaming will continue to grow, in part due to exposing more people to more games during Covid. Game companies will also grow their revenue derived from selling extra content and items, or virtual goods as they are often called, “in-game” and this source of revenue will grow by double digits around the World.
11. The stay at home orders for parents and kids has exposed most families to remote learning, at all levels of education. The “remote cat” is out of the bag and I don’t think the traditional educational system will be able to put the “toothpaste back in the tube”. Remote learning will grow considerably in 2021, and potentially more kids will be officially home-schooled. For colleges and universities the tough question is will people still spend and borrow big money to pay huge tuition bills for four or five years?
12. Security and privacy concerns will continue to dominate the high-tech news in Washington, D.C. and the European Union. Governments and companies (look at Apple’s changes about device identifiers) will take steps to protect consumers from security breaches, as well as from invasions of their privacy, including some of the targeting of advertising that is used today. I do not expect any government to successfully force the break-up of companies like Google or Facebook, despite the predictions of others.
Last year I presented my predictions in technology and media for 2020 in Forbes.com. As one would expect, in some cases I was right on the nose, in other cases, I was a few steps behind, and in a few cases, I was just plain wrong. I will be publishing on Forbes.com, in a few days, my predictions for 2021, but lets look first at how I did in 2020. This will be a “self-graded” evaluation. The prediction is in normal case below and the evaluation is in italics.
1. Grade: – A
Prediction: “Unity will be a very big, and successful tech IPO in 2020.”
Outcome: Unity was clearly one of the bigger and better tech IPOs in 2020.
While Snowflake (who had ever heard of them before?) and Palantir also had huge IPOs, exceeding that of Unity.
2. Grade: – B
Prediction: “Home voice platforms will move toward ubiquity in the U.S. and many more services, content, gaming and other features will be offered through voice platforms.”
Outcome: Though rates of growth for voice assistants and smart speakers slowed down this year, the market continues to grow by at least double digits. While not ubiquitous yet, these devices are moving in that direction, at which time the applications for these devices will flourish.
3. Grade: – A
Prediction: “The ‘no code movement’ will prosper in 2020. New tools enable the average consumer to make an app, game, or other software using creator tools from companies like AppOnboard, Roblox, Tongal, etc.”
Outcome: The “no code movement” is part of the creator economy – the idea that regular individuals can make profitable content with no professional education or training. Roblox is one of the hot examples of the creator economy where the development of games is so easy that thousands of people are regularly making new games for Roblox. Other companies such as AppOnBoard/Buildbox and Manticore have made numerous announcements of their growth and success this year, as well as AppOnBoard’s success with a number of the top games in the charts built on their platform.
4. Grade: C
Prediction: The App Stores will encounter more competition from other companies as we have seen with Steam, Epic, etc. This year will be the beginning of the Post-App Store competition for Apple and Google.
Outcome: While Epic, Steam, and others are launching their own app stores and offering better revenue splits with the developers, the Apple and Google App Stores have had another great year. Perhaps this will be one of those predictions that needs another year or two to mature?
5. Grade: A
Prediction: Everybody coming out of high school and college wants to be a start-up CEO.
Outcome: While it is hard to have data to prove this, ask anybody funding early stage companies, and it sure feels like everyone under 25 wants to be a CEO.
6. Grade: C
Prediction: The best days are behind for Netflix. They will see big challenges in 2020 from a wide variety of TV and film content services, including Disney+ who will be the SVOD winner in 2020.
Outcome: While I still believe that Netflix has some challenges (see my upcoming 2021 predictions), clearly this was another great year for Netflix, and I could not have been more wrong. I did, however, accurately note the big success of Disney+.
7. Grade: A
Prediction: Snap will continue to dominate the social media usage of teens and young adults in the U.S. and other high-value countries.
Outcome: Snap had a great year, growing in users, and clearly dispelling the notion that they were a “one trick pony”. The Snap stock has risen dramatically this year – 250%!
8. Grade: A
Prediction: Cord cutting will continue to grow driving skinny bundles, SVOD, AVOD, and other digital content.
Outcome: I was early, as an analyst, in predicting that cord cutting would become a major challenge to the traditional media companies. That has borne out to be true over the years and this year the cord cutting continued to intensify.
9. Grade: A
Prediction: The Internet and the Web are all about video. People don’t want to write, but they love pictures and video. The Web will be the strongest video platform ever. And the phone becomes both a camera and a TV with more video content being consumed on smartphones.
Outcome: When you survey smartphone consumers you find many people watching video on a regular basis on their “small” screen. The smartphone has become a TV and on all devices consumers are voraciously consuming “old” and “new” video content.
10. Grade: C
Prediction: 5G will present amazing mobile opportunities for publishers and consumers. The phone will become increasingly central to the production and consumption of video and other content. 5G will be a game changer, especially in markets where traditional IP connections are slow.
Outcome: While not my fault, 5G has not rolled aggressively this past year and we will see how deeply 5G penetrates in the year ahead. Once 5G is ubiquitous the power of digital content and services will grow even stronger.
11. Grade: B
Prediction: AI will be central to most big data problems, prediction solutions, discovery solutions, and management decision. AI will be proven to be big business that delivers value now.
Outcome: Artificial intelligence is at the core of so many big data companies and deals today. It seems like most new technology companies speak to AI in one way or another. While this is still the early days of AI, it is apparent that the best technology in this area will drive very successful companies.
12. Grade: B
Prediction: Tech and media companies will be challenged by the US, European and other government efforts to control data privacy and protect consumers from fraud and privacy breaches. Efforts will grow to break-up Facebook, Google, etc.
Outcome: Anyone running a Website or a digital app knows that the laws and rules are changing and growing in regard to consumer privacy and security. Big and small digital companies are all working hard to meet the demands of the regulators and legislators. It appears that the demand for more privacy and security regulations will be even stronger in the near future. And there is no reason to believe that the U.S. Government is going to push hard to break-up companies like Google or Facebook.
For a final grade I end up with a 3.25 out of 4-point grade average. So I guess I will settle for a solid B in the predictions department for 2020.
Advertisers are always battling against the seemingly innate feeling of people that “they just don’t like ads.” Advertisers are often looking for new angles, new twists, and new ad “products” that will grab the consumers’ attention and allow their brand, product or service to stand out among the population. Some advertisers have tried to make their ads look like “newscasts” or “content specials”, others regularly use known celebrities, as well as various “gags” to get consumers’ attention.
Sometimes I feel like the advertisers are focusing on just trying to “trick” people into watching an ad, rather than asking themselves a more fundamental question, “how can we make advertising more appealing to consumers?” One of biggest complaints consumers have about advertising, be it on TV or on digital platforms, is that ads interrupt, they get in the way, of content I want to watch, or listen to, or read.
Why then haven’t advertisers tried shorter ads? If an ad is 15 seconds and not 30 seconds on TV, then it is half as intrusive. Likewise, in digital video advertising, consumers might see 30 second and 15 second ads as “long”, but they will tolerate a 6-second ad (like many of the ads on YouTube.) We can’t force advertising our consumers, we have to make it at least somewhat inviting, and hopefully (and more advanced targeting will allow this) directly relevant.
So then what evidence do we have that shorter ads are better ads? I know many years ago I heard from a large media company that they had tested promo ads for their own TV shows and that they had tested 30 second ads against 15 second ads and found that the shorter ads drove better recall for the promos.
More recently, MAGNA, a well-respected business intelligence and consulting company, in collaboration with the IPG Media Lab, and one of the top companies in social media, Snap, conducted a study comparing 15 second ads against 6 second ads in the mobile video space. Even though the 6 second ads are MORE than 50% shorter that the standard 15 second ads, they still had the same impact (actually slight more) than the longer ads, as measured by key metrics.
Furthermore, this study found that both 6 second and 15 second ads were equally successful on mobile devices in driving the same level of aided recall for the product or brand, but the 15 second ads were considered more intrusive by the viewers.
Brands, products, service and all advertisers should seek to explain concisely and directly, particularly when advertising in the digital environment, what the value proposition of the item being advertised is and why it is relevant. The traditional TV ad world should look at trying much shorter ads on the TV platforms, and perhaps even less ads per show. Some advertisers might then pay a premium for shorter, better ads, that are not hidden away among the clutter of ads on TV and on digital platforms.
Wouldn’t it be great if the major advertisers followed the mantra by customer advocates to, “surprise and delight the consumer” by offering up shorter, more compelling ads.
Much has been written about how Americans (and no doubt people across the world) have changed their behaviors and habits, including their media and entertainment pursuits, due to the stay at home environment caused by the Covid pandemic. In my own research I see many consumers (25-30%) who report that they are spending more time on websites, digital services, streaming media, etc.
Ecommerce platforms, whether they are Amazon or ETSY, are more than just digital retail outlets – they are digital media and content companies too. Many consumers love to browse for products, services, vacations, etc. as a form of entertainment on digital services. Pinterest’s PINS+0.7% whole vision is based on sharing and enjoying pictures and videos of cool products, places and people. The old, out of home behavior, of window shopping is now online – “retail and shopping as entertainment.”
Etsy was founded in 2005 as a Brooklyn-based Website for hand-made goods, crafts, related supplies, and other products embraced by the “maker movement”. In fact, there is a media company, Maker Media, which promotes conferences and digital content regarding such products. People don’t just buy these products, they live a lifestyle around their roles as makers and/or buyers of local, specialized, “crafty” products. The Maker Lifestyle includes consuming and creating content around the maker movement or the “passion economy”.
Etsy’s traffic and revenue has increased over the last year. Revenue has more than doubled in that time period. No doubt this has been achieved through a combination of the tailwinds of the secular growth of the ecommerce market, as well as the “black swan” moment of the Covid pandemic. It is interesting to note that in Etsy’s third quarter over 10% of their revenue were masks – mostly from small manufacturers with a wide array of mask themes.
Etsy is also using the pandemic as an opportunity to reach new customers, including running major TV ads throughout the year.
Etsy has clearly been one of the many digital winners due to the pandemic and the related “stay at home” environment. Though their stock struggled in the early years, after their IPO on 2015, and continued to trade poorly for a number of years – hitting a recent low of less than $40 a share – Etsy has skyrocketed today to almost $180 a share, representing huge growth of 450%.
Below is a chart from Statista that shows the dramatic growth of Etsy’s revenue over the years. Clearly the Internet is providing more and more opportunities for small and medium sized businesses to reach consumers, as well as an opportunity for big brands and manufacturers to reach all types of consumers. Etsy, both as a product seller, and as a content site, has become mass market and the pandemic has catalyzed that growth.
Throughout the pandemic many people have talked about how their various behaviors have changed in terms of how they spend their time. Gaming has been one of the big areas where folks are spending more time. Recently one game studio, Nifty Games, who raised $12 million last year, announced that they were moving into the big leagues, with Peter Moore joining their Board of Directors.
Peter Moore has a long history of running very successful gaming companies from his early days at Sega to his leadership of Xbox, then his job as head of EA Sports, and then serving as EA’s Chief Operating Officer. More recently, Moore was the CEO of Liverpool Football Club. He recently announced he was stepping down from that position after Liverpool’s big win of the FIFA Club World Cup for the first time. Liverpool also won, under Moore’s leadership, the 2019–20 Premier League championship, their first top-flight league title in thirty years.
Peter Moore is perhaps the biggest name in sports and video gaming ever. Nifty Games looks forward to building on his reputation and connections as they build their mobile sports games, NFL Clash and NBA Clash. Nifty has licenses from both the Leagues and the Players Associations.
In an exclusive email question and answer exchange, Moore expressed big enthusiasm for the future of mobile gaming, even with his extensive background in PC and console gaming, saying he “couldn’t be more excited about what the mobile platform is able to bring in the coming years as regards even more innovative game experiences. Powerful devices, 5G connectivity, and even larger screens all point towards even greater adoption of mobile gaming.”
Moore has spent the last three years in his original homeland, the U.K., while running the Liverpool Football Club, but he is now returning to California where he spent many years. Nifty Games is based in San Francisco. When asked why he was returning to California, Moore expressed his love for California and his family saying, California is where I have spent most of my 38 years in the United States, and it’s where our children now all reside.”
Jon Middleton, the CEO of Nifty Games, said that Peter Moore is a gaming “trailblazer” in announcing the appointment of Moore to the Nifty Games Board. In an exclusive exchange with me by email, Middleton said, “In the mid 90’s, Peter ran marketing for Reebok and he left for Sega. He clearly saw the potential of gaming. Games climbed out of parent’s basements and migrated from dorm rooms to living rooms. Peter’s a proven market maker and has delivered gamers big leaps forward in gameplay repeatedly with Sega Dreamcast, Xbox 360 and EA SPORTS. As talented game creators were writing code and designing incredible digital worlds, Peter addressed gaming’s most fundamental aspect – building the gamer community. While running Xbox, he pushed for games which fostered competition, and then connected competitors online with the success of Xbox Live. Famously, he went so far as to tattoo the logo and launch date of Halo 2 on to his arm for unveiling on stage at the big gaming convention each year, E3. There’s a ton of reasons why gaming has grown from millions to billions of players worldwide, and Peter Moore is one of those reasons.”
A mistake is often made by the Silicon Valley “insiders” when they lump all traditional media into one big (failing) bucket. Newspaper advertising in print has been decimated, but TV advertising has actually held up quite well, even during the pandemic. While we are all watching a lot of Netflix NFLX+0.3%, advertisers know that millions of consumers are watching traditional broadcast and cable TV every hour of every day.
According to a recent report from MoffettNathanson, the firm named in part for Michael Nathanson, a long-time, well-regarded media analyst, reported a 3% increase in U.S. TV advertising revenue in the third quarter of this year. The firm compared that to national advertising spending that fell 3.5 percent. For this final quarter of 2020, Nathanson envisions an increase of 2% in TV advertising revenue.
The report is titled “That Was Unexpected!” and Michael Nathanson spoke to why TV advertising revenue was remarkably up this past quarter, “First, the third quarter has a once-in-a-lifetime wave of every major sport returning to the market. Second, the intense 2020 election cycle attracted huge local, regional, and national ad spending – which we estimate to be up roughly 75 percent over 2016 – in key presidential swing states and in the fight for the Senate.”
Nathanson forecast strong future revenue for the TV industry, saying, “The TV ad market will post strong results in the coming three quarters as sports events, including the Olympics, return to their natural cadence.”
In contrast, the newspaper companies continue to lose advertising revenue, and in most cases, subscription revenue too. The national newspapers, particularly The Wall Street Journal and The New York Times NYT+0.9% have avoided this value-destruction by successfully driving paid-subscriptions online.
The Pew Research Center recently issued a report that documented, to no one’s surprise, that advertising revenue from the major local newspaper chains, already suffering from plummeting print advertising revenue, have been slammed even harder during the pandemic and the resultant economic recession.
Pew reported, that among the six publicly owned newspaper chains — Gannett GCI.I0.0%, New York Times, Tribune, McClatchy, Lee and Belo AHC0.0% — who own and operate more than 300 daily newspapers, advertising revenue fell by 42% over year last year.