The impact of the pandemic (on the media industry) may be smaller than expected, according to Tim Peterson, Senior Reporter, Digiday. Petersen talked with several media executives to understand how they view the pandemic’s impact on the industry and came up with some surprising findings.
“The media business has not been permanently transformed all that much,” writes Petersen. “At least not yet. And it isn’t likely to as a direct result of the pandemic.”
In the end, I don’t know that much changed. I think for us, and probably a lot of others, we did a gut check on costs, trimmed away unnecessary costs and got in better fighting shape.Media executive
The normalization of Covid induced peaks and troughs
The two revenue generating sources that were initially directly impacted by the pandemic were ad revenues (declined) and subscriptions (rose).
Ad revenue rebounded by the end of the year—multiple media executives told Petersen that their companies’ fourth-quarter ad revenue in 2020 ended up being higher than in 2019. Subscriptions grew rapidly at the beginning of the pandemic but are “likely to subside as the news cycle (hopefully) settles down compared to last year,” suggests Petersen.
The subscription bump was more of a demand for news when crazy shit happens. It was a year of crazy shit happening non-stop, so the demand for news and people’s willingness to pay for it will decline. That bump will be reduced.Anonymous media executive
The rise in subscriptions helped offset the loss in advertising revenue to some extent. The same applies for the events business. The brake on in-person events drove publishers to organize them on virtual platforms, helping reduce the losses. Though they are still being held online, media executives expect that within three years, the events business will return to how it was before the pandemic.
“The big changes”
While executives are still figuring out the long-term impact of the pandemic—the shift to remote work, cost-cutting measures and fluidity of the advertising market, are expected to endure. Publishers would likely undertake a cost–benefit analysis of returning to offices. Same goes for business travel.
There are so many things we do that take an astronomical amount of time, like traveling to the West Coast for a meeting. So much can be done via Zoom.Anonymous media executive
The changes that are expected to have a longstanding impact on the industry are not connected to the pandemic. They come from Apple’s and Google’s crackdown on tracking and phasing out of the third party cookie. Publishers are now focusing on collecting first-party data more than ever before, to boost their revenue generating initiatives.
A lot of the changes were things like Google and Apple [announcing moves that will limit tracking for targeted advertising]. Those are the big changes. Those are going to happen one way or another, but they have nothing to do with Covid-19.Anonymous media executive
“Incumbent on news outlets to do things differently”
Another lasting change, once again not connected to the pandemic, will be measures to address diversity in media companies as well as the content they produce.
“The outcry over racial inequality calls for media companies to finally take significant steps to address the lack of diversity within their organizations,” writes Petersen. “Especially among their leadership ranks, or risk losing their BIPOC employees—as well as their BIPOC audiences and the advertisers who want to reach them—to companies in which diversity is supported.”
Looking ahead, many publishers who focused on reader revenue, are at an advantage as subscription gains during the pandemic have held steady. That also means they have more first-party data compared to pre-pandemic and more opportunities to serve readers better.
“Consumers, more than ever, need a broad content mix,” suggests veteran Journalist and Professor Damian Radcliffe. “It would be incumbent on news outlets to do things differently,” he adds.
“This may involve telling stories in fresh and innovative ways, changing the tone of content, engaging with audiences online and offline, as well as exploring new beats and approaches to storytelling (such as solutions journalism).