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Welcome back to Media Matters. We at Media Dynamics, Inc. are happy to resume our publication schedule for the first time since mid-March, when, like all of you in the New York metro area, we closed our office and began following stay-at-home orders. As we slowly begin to emerge from this long and anxious period, we want to look back on how this time has affected the media, and what we might expect in the future. This issue’s focus is on TV, but we plan to look at all the major media in the next few issues. As the summer progresses—and hopefully the trajectory of this pandemic becomes clearer—we also look forward to resuming our annual publication cycle, beginning with CPMTrack 2020 and ACES 2020-21.
I. People Are Watching
As the U.S. entered lockdown and people began living under stay-at-home orders, media consumption rose, particularly “TV,” including streaming media. However, the degree of this increase—and how long it will last—remains in question.
In the early days of the epidemic, the research company, Civic Science, reported that the week of April 9th, 63% of roughly 2,500 respondents queried said that they turned to TV/movie watching to be “uplifted” during the pandemic, far ahead of the second highest response (“quietly relaxing”) at 49%. Clearly, TV was not only a source of information about the epidemic, but it was also comforting, as people sought out the tube in its various forms for entertainment and diversion.
However, only two weeks earlier, GlobalWebIndex surveyed respondents in the U.S. and U.K about how much more TV/video content they were consuming since the beginning of the Covid-19 crisis. Surprisingly, fewer than half of respondents claimed that their consumption had increased (37-38% depending on the source of content). Men and upper income respondents were more likely to claim increased viewing—likely as a result of being at home more—which is a reversal of traditional viewing metrics, but findings by age group fell along expected lines, with younger generations claiming increased viewership of online videos, and older generations claiming more broadcast TV consumption (see table).
But setting aside claimed viewing, what did the actual numbers say? Per Nielsen findings, in April, total streaming minutes on an average day for persons aged 2+ were nearly double that in April 2019. In this period, Netflix lead with 33% share of streaming minutes, followed by YouTube (20%), Hulu (11%) and Amazon (8%), with all other streaming services comprising the other 28%. Peak streaming occurred in early April (169.9 billion minutes) and had declined to 150.5 billion by late April.
Nielsen’s findings for “Total Use of Television” followed generally the same pattern. In its report, “In the ‘New Normal of Covid-19, Local TV News Proves to be the Medium of Choice,” Nielsen compared 25-54 “share of total gross quarter hours viewed across major broadcast channels” for the week of 3/9/20 versus the week of 2/3/20 and found bumps for local news (+18%), general drama (+22%), participation variety (+38%) and situation comedy (+14%).
Although such findings could be seen as good news for TV, Nielsen’s recent release of its overall L7 season rating showed that broadcast TV network primetime viewership was down 5%. Fox was up 17% (thanks in large part to the Superbowl), but CBS was down 14%, NBC down 9% and ABC was down 3%, even accounting for viewership increases during the pandemic. With viewer fatigue setting in, the summertime rerun season approaching, and the production of new content in question as the Covid crisis continues to play out, the future is anything but certain.
II. Nobody’s Buying
Although increased viewership may have been good news for some, as we all gathered around our TVs, the economy was falling apart around us. The unemployment rate shot up from 3.5% in February to 14.7% in April, and will get worse. Retail took a nosedive; according to the latest U.S. Census Bureau’s “Advance Monthly Retail Survey,” April 2020 retail sales were down 18% compared to April 2019, and food services/drinking places were down 49%. Although internet retail has helped the overall numbers, certain retail sectors have been hit harder than others, with clothing and accessories stores down 89%, furniture and home furnishing stores down 67% and electronics stores down 65%. There’s just not much good news in sight. It’s no surprise then, that consumer confidence has plummeted, with researchers such as GlobalWebIndex reporting a steady increase in the number of respondents delaying purchases, particularly vacations and luxury or non-essential items.
III. Ad Sales Are Down
Despite the fact that more people have been watching TV during the pandemic, ad revenues have been way down as advertisers suspended or cut back on their advertising. Per the Standard Media Index’s April year-over-year findings, ad revenues were down for some of the major TV entities, including WarnerMedia (-51%), Fox (-46%) and ViacomCBS (-43%). In addition, SQAD reported that the big 3 scatter ad market was down 30% in April compared to Q1 2020. Finally, MediaPost has reported that TV station groups saw even sharper declines upwards of 40% in the same time frame, and estimated that national ad placements have dropped 20-25% since March.
This leaves TV in an uncertain position, although the same could be said for all businesses at this point, as well as our country in general. But for TV, even though more eyeballs are watching, if nobody’s buying, does it even matter?