Originally Posted on Forbes

We are now in the very heart of the summer movie extravaganza – at least that would have been true in past summers. But now, across America movie theatres are closed, openings are being pushed back and films are languishing unreleased or pushed out of the in-theatre queue to be released digitally. The Covid-19 pandemic has almost entirely shut down the film industry worldwide.

Despite the massive economic and safety challenges for movie makers and for film attenders, Screen Engine/ASI, a growing movie, TV, digital and entertainment research and strategy company based in Los Angeles, has announced the launch of a new digital, Internet-based product providing a promotional marketing tool for film, TV and video production companies in the era of a stay-at-home society.

Traditionally, movie companies have used “test” screenings and “buzz” screenings to assure the quality of the movies and to create excitement around the upcoming launch of the movies, particularly in key markets. Now, of course, the studios have lost their access to the movie theatres where traditionally hundreds of thousands of consumers have gathered annually to watch movies free for testing or marketing purposes.

Screen Engine/ASI has released the “Virtual Screening Room” so movie and TV studios can still host “word-of-mouth screenings” and create buzz for upcoming movies, but safely and remotely in movie fans’ homes.

Running these promotional screenings online, vs. inside the confines of a theatre, however, raises worries about security, particularly the pirating or copying of films before they are released. The Virtual Screening Room has been designed to provide security safeguards against such problems, according to Screen Engine/ASI.

Andrew Ly, founder of ticktBox, which was bought by Screen Engine/ASI last year said in an interview with The Hollywood Reporter, “We’ve built a one of a kind cross promotional and marketing platform for studios to run their promotional screenings all within one suite in response to the social changes resulting from the virus outbreak, while eliminating the health concerns of attendees being physically present.” Ly said the new product from Screen Engine/ASI will be used by a number of studios to aid their film marketing, including a premium video-on-demand title coming out later this summer.

TicktBox’s parent company Screen Engine, is one of Hollywood’s leading research and data firms, and is backed by the prominent NYC-based private equity firm, The Wicks Group. Screen Engine has been hiring numerous big names from the TV and movie industries to drive their expansion, including the hiring of Bruce Friend, as Chief Product and Innovation Officerlast year, who has lead numerous research companies, as well as being the executive in charge of research at a number of big studios. Screen Engine also quietly hired the former head of TV station research and consulting at Magid Associates, Steve Ridge, to expand Screen Engine’s work with TV stations. A source who asked to remain anonymous, said that the appointment will be formally announced in the weeks ahead, along with key new clients.

Kevin Goetz, Founder and CEO, Screen Engine/ASI, in an exclusive interview with me, said that he has been building a firm “with the best minds and connections in the industry.” He went to say. “I am thrilled to lead the launch of our groundbreaking virtual, word-of-mouth geographic targeting for entertainment marketing. Our goal is to work with clients and their agencies to optimize their marketing spend by ensuring they are targeting and reaching audiences that are most likely to drive positive word-of-mouth, and in turn, realize full market potential for entertainment IP. In the next few months, our new market targeting solution will expand to allow clients to build customized targets for specific genres and franchises.”

William Shatner, one of the great icon pop culture figures of our time, from Star Trek to pitching Internet company, Priceline, once said, “I love to go to a movie, get a Diet Coke and a barrel of popcorn.” We will be waiting to see if the movie industry can send us all popcorn (buttered or not as you please) alongside our digital content.

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Originally Posted on Forbes

In these days of pandemic, protests, economic recession and angst among the world’s population a recently issued report shows that consumers continue to shift away from traditional media sources for their news and are moving more towards social media and messaging services to find the news.

Long gone are the days of people getting most of their news from a local TV station, their local newspaper or the national newscast from one of the networks. Over 15 years ago, we already saw the substantial decay of Americans using traditional news sources and instead the Internet becoming a major source of news, particularly for the 18 to 34 year old demographic. This data comes from a study done for Carnegie Corporation in 2005. A research group I led at the time was responsible for the study. Carnegie Corporation is a major U.S. charitable foundation with a significant interest in journalism and news.

As newspapers have fallen dramatically in usage, and the national newscasts have dropped in ratings, the swing to new sources of information has accelerated considerably. Reuters Institute for the Study of Journalism at Oxford University has recently issued a report on the state of digital news around the world.

One of the very notable facts coming out from the study is the heavy use of Instagram for news which could soon possibly overtake Twitter. Instagram news consumers were 11% of the social media population. Twitter was statistically tied at 12%. Just as we found in 2005 for Carnegie Corporation, the shift away from traditional news media sources is being led by the younger generation, in this case people under 25 years old. Two-thirds of that age cohort said they use Instagram for gathering news information. The same age group reported that they were two times more likely to look at news on social media apps.

Facebook leads with 36% of social media consumers using the social media giant for consuming news. YouTube had 21% of social media users looking at news on the popular video site. WhatsApp had 16% of consumers in that group and 12% used Twitter. Facebook owns both Instagram and WhatsApp.

In this time of political and social upheavals, it is interesting to note that the Reuters study (conducted by YouGov, a research agency) only found 14% of people in the US trusted news on social media compared to 22% in regard to news gathered from search engines. Also, as further evidence of the power of social media in driving news to consumers, social media as a news source, saw ongoing growth with news consumers, unlike platforms such as all online sources combined, TV, and print.

When thinking about what we know about the news and where we get our news, I reflect back on Will Rogers’ famous quote: “All I know is just what I read in the papers, and that’s an alibi for my ignorance.”

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It has been widely reported that ByteDance, the Beijing-based digital entertainment and information company, had impressive 2019 revenue and earnings. ByteDance had revenue of $17 billion in 2019, up from $7.4 billion in 2018. In the first half of 2019 ByteDance is reported to have had revenue equal to or exceeding the whole year of 2018. According to the same reports, ByteDance’s profit was $3 billion for 2019. It is also reported that they have over $6 billion in cash available for investment and growth initiatives. As a privately held company, ByteDance does not officially release their financial data and I was not able to get a comment from ByteDance regarding their financials.  

ByteDance has been reported to have a valuation over $100 billion and as high as $180 billion. ByteDance has announced that they have over 60,000 employees in 126 cities.

ByteDance owns TikTok, which is their non-Chinese mobile app which allows consumers to make short videos and share with the millions of users on TikTok. TikTok is headquartered in Los Angeles. Kevin Mayer, the former Chairman of Direct-to-Consumer and International at Disney DISannounced last week that he was going to ByteDance as COO of the whole company, and CEO of TikTok.

TikTok is reported to have over 800 million daily active users which compares to 1.73 billion daily active users for Facebook, who reported that number this year.

ByteDance has a number of core products that use artificial intelligence to choose content that will be shared with readers whether it is in their news and information content product, Toutiao, or their entertainment apps, particularly Douyin and TikTok. Douyin is a mobile app launched in China by ByteDance in 2016 focused on consumer-generated short videos.

Much of the revenue for ByteDance comes from advertising and in-app purchases, both areas with a lot of room for growth, plus ByteDance’s user numbers continue to grow rapidly. ByteDance was founded in 2012. ByteDance has raised money from funds like Softbank, KKR KKR, Sequoia, General Atlantic, Hillhouse Capital Group, Coatue, SIG Asia Investment, and Source Code Capital. Knowledgeable sources have indicated to me that there are also some influential Internet-related investors from around the world, invested in ByteDance, some at a very early valuation. This will be a company that will be closely watched for an IPO or other liquidity event.

Every few years a new “bright shiny object” appears on the digital scene. Sometimes these companies go on to be huge (Amazon AMZN, Google, Facebook, etc.) and other times they fail massively – Excite.comGo.com/Infoseek, Vine, Friendster, etc. Other companies may not be the “bright shiny object” of their early years, but they are still gaining momentum and traction, such as Snap. Even MySpace, a company that most people probably assumed was shut down and written off entirely, is still alive with about 4% of American social media users reporting they are currently using Myspace in a quantitative study I conducted with 2,400 Americans in June of last year.

Which flavor of “bright shiny object” is TikTok? Short-term or long-term?

TikTok has received a lot of attention in the U.S. and around the world recently, including the announcement of the new CEO of TikTok (and COO of parent company Byte Dance), Kevin Mayer, the head of Disney DIS’s Direct to Consumer services and International (including Disney+). Mayer was previously the planning and M&A guru at Disney. Forbes writers Dawn Chmielewski and Abram Brown reported in detail the search by Byte Dance for a CEO of TikTok and the hiring of Mayer.

So the question is now: is TikTok more like Vine (short 6 second video serviced owned by Twitter TWTR and shut down) or more like YouTube, owned by Google GOOGL, which reportedly has revenue over $15B a year – mostly advertising – and over 125M monthly unique users in the U.S. alone.

While some analysts look at TikTok as competition for the social networks – Facebook, Instagram, and Snap, there are many reasons to think of TikTok as more of a competitor to YouTube. TikTok is not about sharing what you did today or where you went (though there is some great travel content on TikTok), but more about creating and sharing content, such as songs, dances, ideas, challenges – all presented in short video form. Unlike Vine, which limited users to six seconds, a TikTok can be as long as 60 seconds, with a function that combines four videos of 15 seconds each. Furthermore, you can upload to TikTok longer videos shot outside of the Tik Tok app.

TikTok, whose mobile app is free, is owned by Byte Dance of China. Byte Dance is a private company with many reports that it is worth $100B and beyond. Byte Dance runs a similar service to TikTok in China, Douyin, which was launched in 2017.

TikTok was launched outside of China in 2018 and merged with Musical.ly, another company owned by Byte Dance, that year. Douyin and TikTok when translated from Mandarin mean: “shaking sound” and “vibrating sound” respectively.  

TikTok was the most downloaded, mobile, non-game app worldwide in January and February of this year. There are over 800M worldwide users. In China there are 400M users which doubled in one year. About half of all smartphone owners in China are using TikTok. Byte Dance is also growing TikTok in India where they have over 120M users. Southeast Asia is another growing area for TikTok.

In the U.S. TikTok is reported to have 60M monthly users, who spend on average 45 minutes a day on the app. A majority of U.S. users of TikTok are female (57%). Over 40% percent of TikTok users are between 16 and 24 years old. Roughly 50% of TikTok’s global audience is under the age of 34. While only 9% of US internet users say they have used TikTok, 49% of teenagers say they have used the app. Another demographic strength for TikTok are the large number of families, siblings, and co-workers that collaborate on TikTok dances, challenges, lip syncs, etc. When you watch TikTok you see many multi-generational users.

Though privately-owned, it was reported that TikTok grossed over $175M in revenue in 2019. TikTok revenue comes from in-app purchases (virtual goods and subscriptions), sponsorships and advertising. All of these areas are likely to grow for TikTok as the platform grows in numbers of users and as TikTok gears up their revenue sales teams.

Tiktok has hired many top Facebook executives and others from Snapchat, YouTube and other companies, before the hiring of Mayer. It is expected that TikTok will continue to pursue some of the top talent at the successful social media and digital video companies. TikTok has a large office in Los Angeles (the largest presence outside of China) and their European efforts are headquartered in London.

Vine failed for many reasons, including that six seconds was too short a time for some people to express their creativity. Furthermore, Vine was bought by Twitter where it withered. It was not a good brand fit with Twitter or demographic fit. TikTok is the main business of Byte Dance outside of China and will not have the problems Vine had at Twitter. Also, the TikTok app has a lot of strong functionality that did not exist for Vine, such as powerful viral tools, easy video recording and editing, mobile first, a great recommendation algorithm and strong social features.  

TikTok is also more than just dances and Vine-like antics. They also have people giving short video advice on health, exercise, the stock market, travel, DIY (do-it-yourself), and even politics. Naturally these categories will reach young people, as well as a more mature audience.

I spoke to a number of 20-30 year olds in the media world and most of them said they used TikTok. Numerous people I spoke to said that TikTok is more like a short/mobile first version of YouTube. I think TikTok is going to challenge YouTube more than than TikTok will challenge Instagram or Facebook.  

I think TikTok will be grow substantially, and quite possibly, will have the longevity of YouTube, which is 15 years old this year. Vine, in comparison, lasted 5 years. My projection of strong, future growth for TikTok in the U.S. is supported by the high evaluation score that TikTok receives from its users – a 4.7 score out of a 5-point scale.

If you doubt the appeal of TikTok, take a few minutes and explore the videos on the app. And don’t miss this one – “The Five Stages of TikTok” on TikTok which you can search for on TikTok or you can watch it on YouTube:

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Advertising expenditures are being canceled, delayed, and in some limited cases increased, all in reaction to COVID-19 and the stay-at-home orders issued across most of the nation. But not all industries and companies are feeling the same effects. Companies in some industries are even glimmering bright lights for the advertising industry. But many companies are simply turning off the light, at least for now, in terms of advertising expenditures. Some advertising executives are guardedly optimistic about the near and medium term for advertising expenditures though. Statista, a business data company, predicts that approximately $26 billion in advertising in the U.S. will be lost due to the pandemic.

The Interactive Advertising Bureau (IAB), a trade group of media and marketing industries in the digital economy,  conducted a study of 205 people from publishers, media platforms and advertising companies regarding how U.S. advertising revenue is being impacted by the pandemic. They reported on April 15 that both buyers and sellers of advertising expect advertising revenues to be down considerably for the period March through June of this year.

IAB expects digital advertising will fare better than traditional linear TV, print, and other traditional, non-digital advertising channels. IAB projects that digital ad revenue will be down 19%-25% vs. they expect linear TV (traditional TV channels) and print ad revenues to be down 27% and 32%, respectively. EMarketer said, “TV ad spending will likely be negatively impacted by the pandemic.” Magazines will be hurt considerably, not just in regard to advertising, but they are losing almost all of their newsstand sales, including airports, for now.

Advertiser Perceptions, a research company focused on the advertising and marketing industries, also did a study with advertisers to assess the effect of COVID-19 on the advertising ecosystem. In their report 64% of advertisers say they have held back a campaign until later in the year. In terms of outright cancellations, Advertiser Perceptions, said 44% of advertisers have cancelled a campaign completely.

Rob Norman, a long-time advertising executive and advisor/director to many companies, says that basic supply and demand are at work here. “Everything other than print have massive over-supply vs. demand,” which he indicated have contributed to “falling CPMs for TV and falling CPCs for performance-based digital” companies.

Nielsen indicated recently that U.S. video viewing could increase by 60% due to the stay at home orders. For the ad-supported TV companies this increase in viewership means more advertising impressions to deliver to their customers. However, the increased consumer time spent watching Netflix and other paid VOD services that do not show ads takes consumers away from the advertising-supported environment of traditional TV. One of the biggest negative impacts on the advertising industry is suspension of live sports, which is a big hit for both traditional and digital sports media.

LightShed Partners issued a report that indicates “less price-sensitive ad spenders are fleeing TV, with far more price sensitive brands/direct-response brands entering to take advantage of lower CPMs.” Some categories of companies are likely to reduce considerably their advertising expenditures because of the the economic fallout from the pandemic. IAB’s study says travel and tourism, brick and mortar retail, restaurants and autos will be hardest hit.

Every nook and cranny of the U.S. and worldwide economies are being negatively affected by the stay at home order due to the COVID-19 pandemic. Rob Norman repeated the well-know aphorism dating from the 16th century, “It’s an ill wind that blows no one any good.”

IAB indicates that their study suggests “a more optimistic view among some for the second half of 2020” in terms of advertising expenditures.

Dan Aks, president of Undertone, a digital advertising technology and network company, commented on the future: “We see digital advertising picking up this May and onwards. We see some industries ramping up their planned ad spend in the months ahead, particularly financial services and consumer product brands.” (Disclosure: I serve on the board of Undertone’s parent company, Perion.)

Advertiser Perceptions’ study with ad buyers indicate that the top three occurrences that will cause them to resume their normal advertising expenditures are: relaxing of social distancing, slowing growth of new cases of coronavirus, or no new cases of coronavirus.

Many executives over the years have spoken about how to respond in crises affecting their companies. Nobody said it better than Andrew Grove, the former CEO of Intel: “Bad companies are destroyed by crisis; good companies survive them; Great companies are improved by them.”

We will see how the advertising chips fall over the months and quarters ahead. Most interestingly, will be to see if any traditional behaviors of ad buyers shift in the post-COVID era.