In early 2020, the TV industry focused on launching new streaming services to keep pace with Netflix while simultaneously trying to keep audiences from ditching linear TV. A year later, everything has been transformed Consequently Covid-19. And yet, at the same time, nothing has really changed.
Yes, the pandemic has supercharged and compressed the evolution of the industry from several years to a few months. But 2021 starts off the same way as 2020: Those same companies are prioritizing their streaming services, in part to attract audiences who fled linear TV during the pandemic.
Initially, quarantined consumers watched more television throughout multiple times of the day, but these new patterns changed when Covid-19 shut down live sports and paused TV production. It strangled the linear TV content pipeline, pushing audiences into streaming – and many have never looked back. Meanwhile, companies such as NBCUniversal and ViacomCBS lost more than a quarter of their advertising revenue in the second quarter due to the fallout from Covid-19.
Where we are now
Over the summer, something astonishing happened: The biggest media companies, reeling from their heavy losses in advertising revenue, joined the streaming rush. NBCUniversal, WarnerMedia, and Disney have all radically reconfigured their organizations to put their streaming platforms at the center, leaving no questions about their priorities for the future.
“Consumer behavior has changed permanently,” says Linda Yaccarino, president, global advertising and partnerships, NBCUniversal. Following the overhaul of her business, where executives now oversee content for multiple platforms, “she is perfectly organized to develop and distribute relevant content to them, regardless of screen. After all, says Yaccarino, “we cannot transform the industry without transforming ourselves and our organization.”
And the transformation has only just begun. This year’s changes to the television landscape may not be as seismic as those that happened in 2020, but it will still be a wild ride.
Where we are going
Most insiders are quietly looking at fall 2021, when the industry begins to emerge more fully from the pandemic, assuming most people will be able to get vaccinated by the summer.
“By the third quarter, the underlying assumption is that the vaccine will be widely enough distributed and that something is considered normal to return,” said Brian Wieser, global president, Business Intelligence, GroupM. In GroupM’s year-end global forecast, the company said it expects struggling travel and movie theater advertising categories to finally be back in full swing by now. there, by capitalizing on pent-up demand.
While GroupM predicts that total TV advertising in the United States will decline 15.1% in 2020 (excluding political advertising) and will increase 7.8% this year, national television will see “lukewarm to negative” trends when Normalcy will return, Wieser says, with a share of spending going to streaming platforms like Roku and ad-supported streamers, including Hulu and Pluto TV, which “are contributing to the erosion of traditional ad-supported television.” But digital extensions and related media, including advertising associated with the streaming businesses of traditional media companies, will grow 23.2% this year (after a 7.8% increase in 2020), which further explains the switch to streaming.
Streaming will transform linear TV from content to ad load
The impact of last year’s streaming-focused media company reorganizations will be more fully felt in 2021, as the top-tier scripted programming once reserved for every company’s cable networks will now be almost entirely funneled to their platforms- Respective streaming forms, like NBCUniversal’s Peacock, HBO Max’s WarnerMedia Paramount +, and ViacomCBS (its upcoming renaming from CBS All Access, which will now be the focus of its scripted efforts).