This week’s edition of Five on Friday includes five features on the impact the coronavirus crisis is having on subscription companies. For example, experts are predicting that COVID-19 will lead to 47 million new streaming video subscriptions this year, the coronavirus is threatening local news coverage, and coronavirus ad blocking is depriving publishers of much-needed revenue. Also, Twitch and SoundCloud partner to help musicians monetize livestreams during the pandemic, and Patreon sees a 30,000 increase in creator sign-ups in March, a 20% increase in just one month.
Experts Estimate Paid SVOD Will Grow by 47M New Subscribers Due to COVID-19
With so many states and countries on lockdown because of the coronavirus pandemic, many are turning to streaming video on demand services for news, entertainment and education. As a result, Strategy Analytics predicts that paid subscriptions to streaming services like Amazon Prime, Netflix, Hulu, YouTube TV and Apple TV+ will grow an estimated 5%. This is an increase of approximately 47 million new subscribers over previous estimates, bringing the total number of global subscribers to paid SVOD services to 949 million by the end of 2020.
“One significant factor affecting future SVOD growth is the impact of the coronavirus in both the short and long term,” said Michael Goodman, director, TV and media strategies in a March 25 news release.
“In the near term, the coronavirus will actually boost SVOD subscriptions, as well as viewing of these services, as an ever-growing number of consumers adopts social distancing or are forced into quarantine. In the mid-to-long term much depends on the length of the pandemic and resulting economic damage. As businesses shut down and individuals are laid off consumers are going to have to make hard decisions about how they spend their money and as wonderful as Netflix, Amazon Prime Video, Disney+ and other SVOD services may be, they are not essential services,” added Goodman.
Strategy Analytics estimates that, in 2025, China will have the largest SVOD market with 438 million paid subscribers, an increase of 131 million from 2019. The U.S. will come in second with 342 million subscribers, an increase of 125 million from 2019. Wow!
What are you binge watching this week?
No News Organization Is Immune to the Impacts of the Coronavirus
Gannett, Lee Enterprises, BuzzFeed and alternative newsweeklies across the country are suffering from the effects of the coronavirus. Advertising dollars have dropped significantly because many businesses are closed as non-essential, and they simply can’t afford to advertise right now. This is causing newspapers and other media outlets to lay off staff, impose unpaid furloughs, and make pay cuts. At the same time, readers need their local media outlets more than ever to report the latest news and to provide reliable information and resources to their communities.
In a March 27 story for NPR, David Folkenflik heard from one of many concerned managers, Sara Rubin, in charge of the newsroom at the Monterey County (California) Weekly. Rubin said they are the local paper of record and, if they can’t report the latest COVID-19 news, the community is missing out on valuable information. In mid-March, Weekly founder and CEO Bradley Zeve and publisher Erik Cushman told their employees that one-third of them would be laid off.
“People in the community rely on us,” Cushman said. “The Weekly will persevere in its journalistic and business mission because the alternative is that people get their information from Facebook and NextDoor, and that is not the remedy from what ails us all.”
The Stranger, an alternative newsweekly in Seattle, laid off 18 employees in early March and suspended its print issue. In The Stranger’s case, 90% of their revenue comes from advertising and stories about music, theaters, museums, restaurants, bars, etc. The coronavirus pandemic has shattered most of those businesses and the majority of The Stranger’s revenue sources have dried up.
In a post on The Stranger’s website, the tabloid makes a plea to readers, asking for support to stay alive.
These are only a few examples of the many news outlets suffering right now. There are many other heartbreaking stories like these. Unfortunately, it is going to get worse before it gets better.
Coronavirus Ad Blocking and Keyword Blacklisting Is Slashing Much Needed Revenue for Publishers
Publishers are not just suffering because businesses cannot afford to advertise right now. Those who are advertising are concerned that their ads may be displayed alongside a story about the coronavirus pandemic, something they don’t wish to be connected to or associated with, reports Craig Silverman for BuzzFeed News. Silverman says that this problem is “starving news organizations of the resources they desperately need in a time of crisis.”
According to Silverman, one major brand cut its digital ad spend on sites including The New York Times, CNN, USA Today and the Washington Post last month. All told, over 2 million ads were blocked on those sites during the first three weeks of March. That brand and others are blacklisting coronavirus and COVID-19 related keywords to prevent their ads from being displayed next to a coronavirus story.
A recent survey by Interactive Advertising Bureau (IAB) indicates that the coronavirus is having a bigger impact on advertising than the 2008 financial crisis. IAB cited the following trends, based on information gathered from 400 advertising decision makers from more than two dozen industries.
- 70% of ad buyers have adjusted or paused their ad spending; an additional 16% are still trying to decide what to do.
- 24% of survey respondents said they have paused all advertising spending for Q1 (survey results were published March 27) and Q2; 46% have adjusted their planned ad spending.
- Digital ad spending is down 33%, and traditional media is down 39%.
In a March 24 opinion piece for Business Insider, David Cohen, president of IAB, spoke out on the issue, urging advertisers to work with news organizations and other content providers.
“There is one simple thing, critical thing, every brand and agency executive can – and must – do in the face of the coronavirus crisis. We ask all brands, agencies, ad verification firms, and other companies in the digital advertising supply chain not to block the news,” wrote Cohen.
“This is not about politics — lives are at stake. All major brands and agencies have the ability to decide for themselves the 10, 20, 50, or 100 news organizations they deem legitimate and critical to our health, safety, and economy. Don’t block them. Don’t block them at all,” Cohen said.
By spending advertising dollars on credible news sites, brands can ensure that those news organizations can afford the staff needed to provide vital information to the public. It also helps fight misinformation and help the public to stay alive and well.
“This is not only a wise thing to do. It is not only kind. It is absolutely necessary,” said Cohen.
Twitch and SoundCloud Partner to Help Artists Monetize Their Livestreams to Offset Concert Cancellations
As of yesterday, 297 million people in at least 38 states, 48 counties, 14 cities, the District of Columbia and Puerto Rico have “shelter in place” orders, reports The New York Times. That means concerts, political rallies, social gatherings, weddings, funerals, conferences, church services and other types of events are canceled, are being held virtually, or have been modified in some way. For those in the performing arts, this can create a devastating economic loss.
The news isn’t all bad though. Amazon-owned Twitch is partnering with audio distribution platform SoundCloud to help musicians monetize their livestreams. Typically on Twitch, an artist or creator has to meet certain minimum engagement requirements to qualify for monetization opportunities through Twitch’s affiliate program. They are waiving those requirements during this difficult time.
To begin monetizing their livestreams, artists have to first create a Twitch account and then complete an online form to request affiliate status. Once approved, they can start earning money from their livestreams right away. Monetization opportunities including fan subscriptions, advertising, merchandise sales, exclusive links for fans and more. SoundCloud offers suggestions and ideas for growing a fanbase in their March 20 announcement.
“It’s an unsettling time for everyone right now, and we know COVID-19 has been especially hard on musicians who were scheduled to play live shows over the next few months. Many creators are turning to live video streaming platforms to connect with their fans,” said SoundCloud.
“To help you keep your career on track, we’re partnering with Twitch so all SoundCloud Pro, SoundCloud Premier and Repost by SoundCloud creators can start earning money from their Twitch streams by fast-tracking Affiliate status. Now, wherever you’re social distancing, you can still connect to millions of fans IRL and get paid for your work,” SoundCloud added.
More than 30,000 Creators Signed Up for Patreon in March, a 20% Increase
Forced to shelter in place and practice social distancing, many of us have more time on our hands than we anticipated. This has provided an opportunity for creators (e.g., podcasters, musicians, writers, gaming developers, visual artists, etc.) and fans to support each other in such a troubling time.
Patreon’s head of data science Maura Church shared in a recent blog post that in the first three weeks of March, more than 30,000 creators launched on the platform. That represents a 20% increase and brings the total number of creators on Patreon to 150,000. At the same time, a large number of fans are becoming patrons to support their favorite creators. Patreon currently has more than 4 million patrons in 180 countries, and creators have earned more than $1 billion to date.
“I’m grateful that the message I can share with creators is that membership works. Digital monetization continues to offer a reliable source of income for creators, even in a time when the rest of the creative economy is struggling,” Church said. “Patreon exists to provide a stable, reliable source of income for creators, and that’s especially important in this time of global uncertainty.