The COVID-19 shutdown has accelerated a paradigm shift in the British media sector and could leave a lasting impact on the industry, according to a webinar panel convened by the Royal Television Society (RTS) last week that featured Enders Analysis\u2019 Claire Enders, Thinkbox\u2019s Lindsey Clay, MP Damian Green and Oliver & Ohlbaum\u2019s Sean McGuire.<\/p>\n
The panelists, in conversation with media commentator Kate Bulkley, weighed in on how the industry can begin to recover post shutdown.<\/p>\n
Enders, the founder of the research firm Enders Analysis, pointed to the \u201cextraordinary renewal in the BBC\u2019s position as the U.K.\u2019s authority for news,\u201d amid the pandemic. Across the board, the U.K.\u2019s public-service broadcasters (PSBs) have seen news consumption increase during the shutdown, Enders added. Commercial viewing has also been healthy, Enders said. But, TV advertising \u201cwill face its largest quarterly decline ever\u2026. It\u2019s nothing short of catastrophic. The market could be down by 50 percent this year if things don\u2019t improve soon.\u201d<\/p>\n
Meanwhile, the full impact of the high unemployment and furlough rates in the U.K., plus Brexit, are still to be felt, Enders said.<\/p>\n
McGuire, the managing director at strategy advisory firm Oliver & Ohlbaum, noted, \u201cWe\u2019ve never seen a downturn this sharp or this deep. [In 2021] there\u2019s going to be a huge lag on employment, a huge lag on consumer spending and on corporate profitability. That\u2019s what drives the media market in terms of pay subscriptions or TV advertising. So it\u2019s going to take us a long time to get out of that. On top of the cyclical effects, [the pandemic] could catalyze some fairly profound structural change in that not all the TV advertising will come back\u2014it might go somewhere else, it might not come back at all.\u201d<\/p>\n
Subscriptions to sports packs could be significantly impacted now that consumers are learning to live without live coverage, McGuire said. \u201cAt the same time, we\u2019re running an experiment in real-time where people are taking up more SVOD and OTT subscriptions. By early April there were 4.6 million new SVOD subscriptions in the U.K. That move from linear to on-demand is definitely being accelerated. So it\u2019s not all catastrophic. There are some wins out of this. But the next two years will see some very profound impact.\u201d<\/p>\n
\u201cThis is truly a paradigm shift in our economy,\u201d Enders added. \u201cWe do expect PSB viewing, BBC viewing, to continue to remain very strong. And Disney+ and YouTube; we\u2019ve seen an extraordinarily positive impact on SVOD subscriptions.\u201d<\/p>\n
As for the road to recovery, Enders stressed, \u201cWe\u2019re not going to be in recovery well into the middle of 2021\u2026. It can get a lot worse than it already is and that will happen when the furlough scheme ends in October\u2026 a hard Brexit if that is the government\u2019s will, we\u2019ll have all the disruption to the NHS, things are going to get an awful lot worse before we can start using that word [recovery]. If we\u2019re looking at a 25 percent drop in GDP in a single quarter, then what are we going to be seeing in the further quarters of this year?\u201d<\/p>\n
If the U.K. slips into a \u201cgreat depression,\u201d Enders said, \u201cadvertising income will not recover [to 2020 levels] until 2025.\u201d<\/p>\n
Green is a member of the Department for Digital, Culture, Media and Sport\u2019s (DCMS) select committee, which is exploring the future of public-service broadcasting in the U.K. \u201cEvery government minister is now facing the entire country wanting bailouts. The TV industry is not high on the list of those who tug the heartstrings. Within the DCMS sector, the tourism industry is flat on its back, theaters, a lot of these are small institutions that will disappear. We know the BBC is not going to disappear\u2014it has the license-fee income. ITV is big enough to look after itself. Channel 4 is more vulnerable but even Channel 4 is not like the South Bank or any of the provincial theaters. I think the support from advertising will continue because there\u2019s a budget for that. But I don\u2019t think there will be another pot of money put into broadcasters of any kind.\u201d<\/p>\n
Clay, the CEO of Thinkbox, which represents the interests of the U.K.\u2019s commercial broadcasters, said that there\u2019s much to be positive about. \u201cTV advertising will get more than its fair share of its advertising money available. There are all sorts of reasons not to be a catastrophist on that front. Nothing else does what TV advertising does. It is irreplaceable. You can\u2019t get the reach of that number of eyeballs. It\u2019s fundamental to businesses\u2019 success. It drives 71 percent of the profit of all advertising generated.\u201d<\/p>\n
As viewing skews more toward on-demand, \u201cadvertising is being transformed as well,\u201d Clay said. \u201cBroadcasters are investing very heavily in Broadcaster Video on Demand (BVOD), Sky\u2019s AdSmart. Interestingly, if you look at the decline in TV [ad] revenue, the decline in BVOD revenue is much less steep. Even over the last couple of months, advertisers have sustained their investment in BVOD more than they have in linear TV. That is a really important part of the future.\u201d<\/p>\n
On the road ahead, McGuire noted that by late summer or early autumn, broadcasters will be running short on content. \u201cPeople are using what they have. At some point we\u2019re going to be living on a diet of repeats and reruns. That is one of the problems that the sector will have to overcome.\u201d<\/p>\n
Vertically integrated media companies will have an easier time getting productions back up and running, Enders said. \u201cITV, BBC will be quicker off the ground. Netflix has a stranglehold on premium facilities. Sky has been building its own facilities. Whether it\u2019s in the U.S. or here, vertical integration and scale will come to the fore.\u201d<\/p>\n
She continued, \u201cThis paradigm shift lays bare what has always been true: public-service broadcasting cannot exist anywhere in the world without the specific intervention of a license fee and a system that is regulated for public goals, including culture. This whole experience is one in which I\u2019m afraid the big will only get bigger.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The COVID-19 shutdown has accelerated a paradigm shift in the British media sector and could leave a lasting impact on the industry, according to a webinar panel convened by the Royal Television Society (RTS) last week that featured Enders Analysis\u2019 Claire Enders, Thinkbox\u2019s Lindsey Clay, MP Damian Green and Oliver & Ohlbaum\u2019s Sean McGuire.<\/p>\n","protected":false},"author":290,"featured_media":10289,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[68,69],"tags":[2388,240],"class_list":["post-10288","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-profiles","category-top-stories","tag-covid-19","tag-royal-television-society"],"yoast_head":"\n