2020 In Review: An Unforgettable Year For MediaBloombergQuintOpinion
When you ask someone what their best or worst year was, you always get an answer through the lens of experience, joys, sorrows, peaks, and troughs in their life. There is never a unanimous answer. But if there ever is consensus on a year, 2020 would probably be it.
In the world of business, every industry is going through change and upheaval brought about by the pandemic. The media and entertainment industry, which this column covers, will probably come out looking very different in 2021, in both the way the content is produced and consumed. I attempt to sum some of the changes and the state of the industry as we count down the last days of this harrowing year.
As I write this piece, I realised I subscribe to nearly five streaming platforms and I bought into each one of them to watch something specific and then stuck on. No, watching is not my full-time job as you might suspect but the pandemic did give me a lot more time on my hands and there is that ever-present FOMO. You have to ask yourself – how much content is really enough and how much can you watch? Eventually, life will see some form of normalcy, I hope, and there is bound to be a saturation point when you will probably be using one or two platforms at the most.
So, the real race will be to be among the ones left standing once the binge-watching comes to an end and people step back into the sunlight.
Till then, a lot of cash will be burnt and a lot of amazing content created.
To Stream Or Not To Stream…
Streaming is definitely not an optional question anymore but a necessity. Just in the last few weeks, we have seen incredible change in the way media companies are looking at the future. The world’s largest entertainment company Walt Disney threw its significant might and muscle into its streaming platform after a year of pain for all its core businesses. In an investor interaction a few days ago, Disney said it was targeting 230-260 million subscribers by 2024 for its mainstreaming platform Disney+ – they also own Hulu, ESPN+ and just elevated the Star brand as its international streaming platform. It showed off trailers and announced a mouthwatering number of new shows from its Marvel and Star Wars franchises and new films from Pixar, which will all head to the platform. Disney+ already has 86 million subscribers in the first few months of launching. It is clear the future adventures from The Magic Kingdom are going to be streamed – not televised nor shown in a theater near you.
AT&T’s Warner Media did something similar. It announced that all its film offerings in 2021 will head straight to its streaming platform HBO Max at the same time as its theatrical release. Wonder Woman 1984 will be the first one and all the other caped superheroes from the DC Universe are likely to follow suit.
This has created a new moment for the future of Hollywood and cinema as we know it. It has split Hollywood with several big-name actors and directors like Martin Scorsese collaborating with streaming platforms. Other Hollywood biggies, like Christopher Nolan, who want the theatrical experience to survive, have criticised the move.
The future of independent and smaller cinema seems to lie with streaming platforms. Of course, this also assumes people are not going back to the cinema, or at least not in droves anyway.
While this has been coming for years, the shift has been hastened by the pandemic leading to changes in consumer habits. The assumption is that most of this change is permanent. The pioneer, chief disruptor, and current streaming market leader, Netflix, expectedly had a landmark year. Its business model was uniquely prepared for this moment. Netflix added an incredible 26 million subscribers in the first half of the year and will probably end the year with more than 200 million paying subscribers as people binge-watch originals like The Queen’s Gambit and The Crown while stuck at home.
Closer home, the streaming platforms – Disney’s Hotstar, Sony Liv, and others had a great year of subscription growth while traditional, ad-dependent media companies struggled. This is leading to changes in strategy as well. Star-Disney, in keeping with its parent, is already pivoting to a streaming future with management changes reflecting that change.
There are of course other large players like Apple TV+, Amazon Prime, Google, and Facebook all aggressively acquiring, creating content, and expanding globally as well.
Traffic, Traffic Everywhere…
While streaming entertainment platforms thrived, the news industry had its own dilemma in 2020. News consumption hit record levels this year pretty much for everyone as the heavy news cycle combined with everyone working from home drove readership and viewership. But all that traffic and viewership wasn’t easy to monetise as advertisement spending cratered. The big shiny outlier was subscription revenue. Most publications that had a robust paywall strategy did exceedingly well as I have written in one of my previous columns.
This is prompting more of them to put their journalism behind a paywall. It makes perfect sense in many cases but it will be interesting to see if this revenue stream will continue its momentum once the consumer is not confined at home.
Publications have to compete not just with each other for subscriptions but with anyone in the subscription business for the finite rupees and time a consumer has.
In the United States, publications also had to contend with the newsletter boom, which is bound to make its way into India (and find its own economics). This is no small innovation. Substack is upending the need for a publication itself for journalists to both showcase their work but also to make a living. It’s linked the reader directly to the writer while creating the opportunity for monetization without a publication or a social media go-between. In an interview with The Verge, Substack CEO, Chris Best, said that the top ten writers on the platform make more than $10 million collectively.
Again, the challenge is there will be a saturation point. So now on top of the five streaming platforms I subscribe to, there are five or six publications, and I subscribe to a few newsletters as well. These, of course, are in addition to Spotify, Education.com (for the kids’ online teaching), LinkedIn, and other things I subscribe to. Yes, when you read this, you might wonder if I am only a data-consuming robot, but I can assure you that I have a family too to whom I owe some time.
So, the question—clearly a personal one—is what’s your subscription equilibrium? Things have been amplified by the need to be confined at home, so will your appetite for news and information change once you are out and about? Multiply and ask that question to millions of people and that really sums up the subscription conundrum for 2021.
2020 was a momentous year for digital advertising in some ways despite the big crash at the beginning of the year. For the first time, digital advertising will constitute more than half the ad spend in the United States, according to Group M. But Business Insider estimates two-thirds of that will go to just three players – Google, Facebook, and Amazon, all of which have seen growth and their stocks hitting historic highs on Wall Street. And digital’s share of the ad pie will continue to grow as they eat into other traditional platforms, maybe even hastened due to the pandemic.
This poses big questions for ad-based business models. Most publications have seen a big fall in ad revenue through 2020 and while some of it will come back, it is forcing cost-cutting and reordering of priorities. In India, even a large and cash-rich player like Bennett, Coleman had a terrible year with the ad slump forcing them to shut a as popular as Mumbai Mirror. Hundreds of journalists have lost their jobs in the last year alone.
It is also forcing mergers and acquisitions to acquire scale. In the last two years, we have seen a lot of media merger activity in the United States. The latest one is of Buzzfeed buying Huffington Post. This consolidation is likely to continue in 2021.
This is unfortunate since some of the best and boldest journalism in the country is now coming from digital outlets like this one you are reading; and live streaming and podcasts are growing rapidly, both in quality and volume. The best hope is that this will force more collaborations between the different digital players and innovation to get around these limitations.
This is by no means an exhaustive list of trends that we saw in 2020.
We saw podcasts come out of the year largely unscathed with some big deals in the space like Spotify’s acquisition of Anchor and Amazon possibly buying Wondery. We saw the events and conferences business evolving into the virtual world with signs that a lot of it will stay that way even when people are less reluctant to meet.
Either way, 2020 clearly was a year we all want to forget but will find it extremely hard to wipe off our collective memory. It will find its way into our references, our anecdotes for years to come. For those of us in the media, it will also be a year in which our world as we knew it changed irreversibly. The trickles of change slowly eating away into the way things were done, suddenly became a flood and washed everything away. Maybe this is what we needed!
I wish all of you readers a better, safer, and more fulfilling 2021!
Parry Ravindranathan is a global media executive and has worked for Bloomberg, Al Jazeera English, Network18, and CNN.
The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.