The Economist’s marketing budget, new services from Apple and Google, the impact of Facebook’s algorithm change, voice’s lack of killer app and fresh data on social media usage in the U.S.
This is the latest in our monthly series highlighting key developments from the past month. Here’s 10 findings from March 2019 which caught our eye:
1. Disney acquires Fox for $71.3 billion
March saw the second largest media merger of all time, with Disney’s $71.3 billion acquisition of 21st Century Fox. Only the AOL-Time Warner merger in 2001, which cost north of $100 billion, has been larger.
The move “reshapes the media landscape and makes Disney an even greater entertainment behemoth,” noted NPR’s Matthew S. Schwartz.
“Disney, which already owns the Pixar, Marvel and the Star Wars brands, will now also get Deadpool and the Fox-owned Marvel characters such as the X-Men and Fantastic Four, allowing for the full Marvel family to be united, Schwartz wrote.
“Disney also now owns former Fox television networks such as FX Networks and National Geographic Partners. Disney will also get Fox’s 30 percent ownership of Hulu, giving Disney a controlling share of 60 percent,” he added.
“In bolstering its trove of characters and stories, the acquisition also puts Disney in a stronger position to take on Netflix and other streaming companies when it launches its own service, Disney+, later this year.”
According to Vanity Fair, “The deal could eventually result in the loss of anywhere from 4,000 to 10,000 jobs, depending on whom you ask.”
The LA Times, meanwhile, commented on how the move “would boost Disney’s share of the domestic box office to at least 40% and reinforce its stronghold in toys, theme parks and cruise lines.”
The move also gives Disney access into international markets, through Star India; and Fox’s interests in Tata Sky, and Endemol Shine Group.
2. U.S. adults spend 10-and-a-half hours per day consuming media
Nielsen’s Total Audience Report for Q3 2018 demonstrated that although time spent using media isn’t changing, the way we consume media is. And quickly.
“There are shifts in where that time being spent is dedicated to, as we see increases in Internet connected devices and app/web smartphone usage that are gradually replacing time spent on other sources.”
Those other sources, especially for 18-34 year olds, tends to be Live + Time Shifted TV, a platform which was down 5% year-on-year in terms of daily consumption. In contrast, time spent using smartphones by this demographic was up 5%.
Separately, as we reported on What’s New In Publishing earlier in the month, YouTube is now responsible for 37% of all mobile internet traffic, with Facebook (8.4%) and Snapchat (8.3%) its closest rivals.
3. Nearly 20% of streaming users borrow login details
Their findings, based on a survey of 1,127 people, highlighted that “Netflix could be losing an estimated $192 million every month and $2.3 billion every year,” as a result of people borrowing passwords from friends and family.
“Nearly 48 percent of people mooching Netflix said they got the login from their parents,” the survey found, “while another 14 percent took their credentials from a sibling.”
“The losses for other subscription services could be less substantial but still incredibly high,” they observed. “Hulu and Amazon Prime Video average between $40 and $45 million in estimated losses each month due to people using their services without paying for them.”
4. Apple News+ announced: new subscription service for 300 titles
Available in the US for $9.99 a month and in Canada for $12.99 a month, customers can sign up for a free one-month trial, which automatically renews after the trial ends. Apple News+ will be available in the UK and Australia later this year.
Through Family Sharing, up to six family members can share one Apple News+ subscription, which includes content from publications such as Vogue, National Geographic Magazine, People, ELLE, The Wall Street Journal and Los Angeles Times.
Apple also announced Apple Arcade, “a game subscription service that will feature over 100 new and exclusive games, including original releases from renowned creators Hironobu Sakaguchi, Ken Wong, Will Wright and dozens more,” as well as Apple TV+.
The company’s new TV service will showcase “exclusive original shows, movies and documentaries,” when it launches this fall. The service will include “a brand new slate of [ad-free] programming from the world’s most celebrated creative artists, including Oprah Winfrey, Steven Spielberg, Jennifer Aniston, Reese Witherspoon, Octavia Spencer, J.J. Abrams, Jason Momoa, M. Night Shyamalan, Jon M. Chu and more.”
5. The Economist spent £50m ($65.2m) on marketing last year
The Economist Group’s 2018 Annual Report is full of insights into how the publisher continues to evolve in a digital age. Along with the familiar story of declining print advertising – and the failure of digital advertising (see chart) to plug this gap – the past 12 months saw a record year for revenues of £367m.
Although operating profits (at £49.5m) before one-off exceptional items were 2% lower than in the previous year “this does not tell the whole story,” the reports says.
“…The £49.5m profit came after spending £12.6m more than in 2017 on marketing the newspaper. This investment in marketing is the cornerstone of our strategy of putting the reader at the heart of our business, stressing the brand values of The Economist in everything we do and investing in the most scalable business opportunity we have: subscription-based circulation revenues.”
The impact of this, Chairman Rupert Pennant-Rea wrote, is that new subscribers were up by 18%. “But,” he cautioned, “as some existing subscribers also leave each year, it is the net increase that really matters. This was 36,000 last year, to a total of just over 1.1m full-price subscribers.”
6. Amazon’s Alexa has 80,000 Apps
“….and No Runaway Hit,” argued Bloomberg.
Despite all the buzz about the future of
“Google and Apple, which trail Amazon in smart speaker sales, also lack a unique, voice-centric hit,” journalist Matt Day said, highlighting research which found that half of smart speaker users says they don’t seek out applications.
7. Parse.ly reports traffic from Facebook to partners down 28%
Parse.ly, the data and analytics company, provided some detailed insights of the impact on their partners by Facebook’s 2018 algorithm change.
In a blog post, Clare Carr and Kelsey Arendt revealed that “from 2017-2018, the overall change in traffic from Facebook to our network decreased by 28%. But that decrease wasn’t even across every category of content.”
Categories most affected by the change were Arts & Entertainment (down 71%) and Music (down 65%) as well as the Style & Fashion category (down c. 60%).
Areas deemed by Carr and Arendt as “the less big losers” were Politics, Politics (Immigration), Politics (Legal Issues), and News.
“While Politics content overall still dropped, it dropped more inline with what we saw across the board from Facebook traffic (28%),” they state. “It also makes up the largest volume of referrals from Facebook, a stat that didn’t change from 2017 to 2018.”
“Whoever it is doing the sharing,” they note – highlighting specifics pages, people and campaigns – “the trend undeniably shows that people find and read politically related content through Facebook.”
8. World’s most popular gamer paid $1 million to play a new game for a day
Reuters reported that Tyler “Ninja” Blevins, the world’s most popular gamer, earned $1 million for promoting “Apex Legends,” when the game dropped earlier this year.
“Ninja has more than 13 million followers on Twitch,” Business Insider commented, “and is best known for playing “Fortnite.” EA’s decision to recruit him as a partner was no coincidence, “Fortnite” is the most popular game in the world right now and “Apex Legends” is the primary competition.”
Electronic Arts (EA) which produced the game, spends over $600 million in more traditional marketing every year, NewsWhip said, noting that Twitch has 15 million daily viewers on average and 2.2 million daily broadcasters.
“One week after release it reached 25 million players, and by the end of its first month it reached 50 million players. Apex Legends quickly rose to the most-watched game spot on Twitch, clocking more than 390,000 concurrent viewers watching live only one day after the game dropped.”
The importance of gaming was underscored last month by Apple’s announcement of Apple Arcade, as well as Google’s launch of Stadia, a subscription streaming gaming service.
9. Google fined €1.49bn by EU for advertising violations
Another month, another European fine for Google. As NBC explained, “European Union regulators hit Google with a $1.69 billion fine … for blocking rival online search advertisers, marking the company’s third penalty in two years.”
The fine followed the conclusion of a detailed investigation of Google’s AdSense advertising business.
At a press conference, Margrethe Vestager, the E.U.’s competition commissioner, said “Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites.”
As we revealed in our January round-up, at the start of the year, France fined Google €50m for breaching GDPR requirements. The Guardian, in its coverage of this latest case, remarked, that the “Tech company has been fined €8.24bn by EU commission over past two years.”
10. Six-in-ten Snapchat and Instagram users – visit each site daily
Underscoring the importance of more visual social media platforms for younger users, new data from the Pew Research Center found that 88% of 18- to 29-year-olds indicate that they use social media.
“That share falls to 78% among those ages 30 to 49, to 64% among those ages 50 to 64 and to 37% among Americans 65 and older.”
Some 78% of 18- to 24-year-olds use Snapchat, and a sizeable majority of these users (71%) visit the platform multiple times per day,” Pew said. “Similarly, 71% of Americans in this age group now use Instagram and close to half (45%) are Twitter users.”
Separately, “roughly two-thirds of U.S. adults (68%) now report that they are Facebook users, and roughly three-quarters of those users access Facebook on a daily basis.”
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