The COVID Bounce and the coming Attention Recession

2020 was by any measure a unique year in modern times. While the societal impact of the pandemic was, and continues to be, horrific, for the entertainment industries it was a year of plenty. At the start of the pandemic, MIDiA Research estimated that there would be an extra 15% of consumption time for the average working consumer. Well, now that the end of year data is in, we can confirm that this ‘COVID bounce’ did in fact happen, with overall consumption time up by 12%. When you consider that the working population is only a subset of the overall population, that 12% means that we were pretty much on the money with our prediction. But while this uplift was seen right across entertainment, some formats did better than others and, crucially, some of that extra time will diminish whenever it is that the population starts returning to work and going out again. Which means that for the first time ever in the Attention Economy, there will be an Attention Recession, with very obvious potential ramifications for all entertainment companies.

The full results of MIDiA’s highly detailed COVID media consumption study is now available to MIDiA clients in the report ‘Media consumption: Lockdown’s attention boom’ and the accompanying dataset. Here are a few of the high-level findings.

  • Everything was up: 2020 was a case of a high tide rises all boats, with all forms of entertainment increasing average consumption time. Video consolidated its position as the leading format in terms of hours spent, but the largest percentage gains were in games (30%) and non-music audio (24%). Consumers even increased their time doing nothing / chilling, illustrating that despite the unsettling chaos of the pandemic, consumers found more time to relax and also to contemplate. Interestingly, doing nothing increased by a greater rate than listening to music.
  • Audiobooks were audio’s big winner: While podcast listening was up by an impressive 35%, audiobooks were lockdown’s biggest winner, increasing average time by nearly 50%. The radio and music businesses’ obsession with podcasts is understandable given how much focus the likes of Spotify, Amazon and Apple have placed on them, but the audiobooks category has emerged as the dark horse of the piece. When all audio time is considered together (radio, music, streaming, podcasts, audiobooks), audiobooks now account for a similar share of total time as podcasts do. Though music streaming was up too during lockdown, it grew more slowly than podcasts and audiobooks so was flat in terms of total share. Radio lost share. The shift is reflected in Spotify’s numbers: its average content hours per monthly active user (MAU) fell by 1% in 2020. Given that this figure includes podcasts, the inferences are: a) Spotify lost share of audio time, and b) music hours fell. It wasn’t just Spotify that did not keep pace with the audio boom. Even apps like the BBC’s Sounds saw a fall in the ratio of weekly to daily users. 
  • Casual gamers boosted games: Games’ growth was driven both by core gamers using the former commute time to get in some extra time on their consoles and gaming PCS. But the biggest growth was driven by mobile casual games. In previous years, mainstream consumers had driven a games surge, adopting titles like Candy Crush, but then shifted much of this time to the likes of Netflix and Spotify as the Attention Economy saturated. With more time on their hands in lockdown, mainstream consumers flocked to casual games once again. This will be a likely casualty of the coming Attention Recession.
  • Music is just one lane in audio: COVID-19 catalysed many pre-existing trends; the audio shift was one of those. Just as Netflix took TV out of the TV, podcasts took radio out of radio and contributed to a wider trend of consumers taking an increasingly format-agnostic view of audio. Breaking long-held habits in lockdown, audiences were able to try out new things and, given that we are nearly a year into the lockdown era, establish new behaviours that will remain to some degree post-pandemic (if that is ever a phrase that will really ring true). Traditional habits like the commute and exercise will now see audiobooks and podcasts competing for music time like never before. For music companies, this means that they need to understand they are now in the audio business and they are predominately just competing in one lane. This does not mean that they inherently need to become ’audio businesses’, but it does mean that they need to build strategies that account for this shift. Meanwhile, Amazon once again emerges as the dark horse with music, podcasts and – via Audible – audiobooks. Amazon looks set to be a big beneficiary of the lockdown legacy.

If you are not yet a MIDiA client and would like to learn how to get access to the ‘Media consumption: Lockdown’s attention boom’ report and data then please email [email protected]

2021 Predictions: The year of the immersive web

As we approach the end of 2020 it is time to look forward to what 2021 may bring. MIDiA has published the fifth edition of our Annual Predictions report which clients can read here. There are 27 predictions in the report, but I am sharing a few of them here. MIDiA has a pretty good track record with its predictions; 79% of our predictions for 2020 were correct.

These are the seven meta and cultural trends that we believe will shape 2021: 

  1. The immersive web
  2. Recessionary impact
  3. The great reaggregation
  4. The return of synchronous experiences
  5. Social consumption and micro communities
  6. Video streaming as a cultural catalyst 
  7. The end of influencers

The immersive web

Web 1.0 was an information dump; web 2.0 added multimedia and social. Now we are entering the third phase, which MIDiA terms the immersive web. As is usually the case with big epoch shifts, this will not be a clear and sudden change but instead a steady change – a change that is, in fact, already happening. The immersive web is characterised by environments in which we do not simply conduct extensions of IRL activity (e-commerce, video calls) but ones that create behaviours and relationships that only, and can only, exist within these environments. Apps and platforms like Roblox, TikTok and Discord are early iterations of the immersive web, but merely hint at what will come. The trend will be driven by Gen Z, who have grown up with social apps from the playground onwards. Gen Z relies more than any previous generation on such apps for social interaction and expression, forming muscle memory for digital-first relationships. The COVID-19 lockdown measures have accentuated this shift, further solidifying Gen Z’s receptivity to future immersive web experiences.

Music

Here is a short version of some of the trends we expect to shape music in 2021:

  • The start of an artist economy: Streaming is a song economy of which the scale benefits rights holders far more than creators. The industry needs to work towards a collection of models that work for artists. Components could be micro-communities (see below), sounds platforms, ticketed live streams, skills marketplaces, and virtual merch. 
  • The rise of micro-communities: Niche is the new mainstream. The next phase of this market dynamic is the emergence of micro-communities; small audiences of dedicated fans who almost consider it an honour-bound duty to support their artists. 
  • The creator tools revolution: Creator tools, particularly music production and collaboration, will be one of the most important market shifts in 2021. Companies like Splice, LANDR and Output will continue to build scale in 2021, changing both the culture and business of music. 
  • Live streaming professionalises: With live unlikely to be anything close to full capacity until the latter part of 2021, live streaming will be used by a growing body of artists as a genuine revenue driver, rather than the audience engagement role it played in much of 2020, driven by increased professionalisation, better distribution and more sophisticated monetisation.
  • Music continues to deliver as an asset class: Although the pandemic dented music publishing’s long-term growth story, music catalogues retain strong appeal as an asset class, not least because they are performing better in relation to many asset classes that have been hit hard by the pandemic and that look vulnerable to the coming recession. The imbalance between supply and demand remains, so expect prices paid to continue to accelerate. 
  • UGC continues to accelerate: User-generated content (UGC) music revenues reached $4 billion in 2020 and will push up to $4.9 billion in 2021. The crucial difference between UGC music now compared to five years ago, is that the focus is on genuine user creativity rather than users simply uploading others’ music.

2020 was a year like no other in modern times, with the impact on digital entertainment both pronounced and creating the foundations for accelerated innovation in 2021. Whatever may happen to the global economic and health outlook, digital entertainment will go through further dramatic change in 2021.

New Webinar on What Comes After Lockdown

0Want to know what happens in the post-Lockdown era? Join us for our free-to-attend Recovery Economics webinar tomorrow (Wednesday 10th June) at 4pm BST / 11am EST / 8am PT for insight on music, radio, games, TV, sports and media.

We will be presenting an overview of MIDiA’s latest research thesis: Recovery Economics. This is our framework for identifying which changed need states that emerged during lockdown will form the basis for new behaviours post-lockdown and what you need to do in order to adapt to this new normal.

What is clear is that simply doing more of the same is not a strategy. The Covid-19 lockdown created severe dislocation across many entertainment sectors but also a host of new growth opportunities. As we emerge from lockdown and enter the early stages of a global economic recession, some of these ‘new-normal’ business models will grow further, presenting increased competition for the ‘old normal’. New and established players alike will have to play by different rules in this coming period, dealing with challenges such as permanent changes to lifestyles, weakening consumer spending and ever growing competition for attention.

In the webinar we will explain how this will look across the music, TV, film, games, radio, sports and media industries.

Register now!

How Coronavirus Will Affect the Entertainment Industries

The coronavirus is a global pandemic. Regardless of what its actual infection and mortality rates might be, it is already having seismic impacts on stock markets and consumer behaviour – the result of which might be to tip the global economy into recession. It is also creating the largest home working experiment in history. Even if coronavirus doesn’t tip us into recession, the next few months will see major disruption of consumer behaviour patterns with major implications for the entertainment industries. However, to introduce an element of calm into the hysteria, coronavirus appears to be following the s-curve (scroll down to chart). So although the data we are currently looking at is two weeks out of date (ie factoring in the incubation period) the early signs are that it tops out as a small minority of the population).

In Q4 2019 MIDiA fielded questions to consumers about how they would change their leisure and entertainment spending if a recession took place and they had to reduce their overall expenditure. The full findings of this exclusive research will soon be published in a MIDiA report: Recession Impact | Cocooning Will Protect Entertainment Spend (the latest in our series of Recession Impact reports). Here are a few highlights and how they relate to the current coronavirus spread.

In the last economic downturn, consumers cocooned, opting to stay in more in order to save money. The signs are that this pattern will be replicated if another recession comes, particularly so because of public concerns about health risks in public places. When we asked consumers which three types of leisure and entertainment spend they expected to cut back on most, going out and eating out were by the far the two most widely-cited options. Live music was also widely cited among concert goers but less so than going out and eating out, with around two thirds of concert goers not planning to stop going to gigs – cancellations allowing. The difference between now and the last economic downturn is that digital content services have boomed, so consumers now have much better home entertainment options than they used to. Cocooning is therefore an even more appealing prospect. Indeed, there are probably already many people looking forward to binge watching themselves through a few virtual boxsets.

Crucially, streaming looks to be relatively well placed. Just over a fifth of consumers expect to have to cancel a video subscription and the same goes for music. However, the impact on music would be more pronounced due to the majority of music subscribers only having one music subscription. So, a consumer cancelling a music subscription means a lost subscriber. But with more than half of video subscribers having more than one video subscription, a cancelled video subscription would most often simply mean one less subscription in the market rather than a lost subscriber.

Of course, when push comes to shove, consumers may find themselves cutting back more dramatically, with streaming music particularly vulnerable because:

  1. Younger people are normally the first to lose their jobs and millennials make up the lion’s share of music subscribers
  2. Downgrading to a free tier still leaves the consumer with a decent music experience, and that’s without even considering the role of YouTube

Across both music and video, a long-term recession – if it happens – would see a growing role for ad-supported. YouTube looks best placed to prosper, not least because Spotify has not had the best of times growing its ad business. Pandora may also benefit, as may the likes of Peacock in video.

In short, whether it be subscriptions or ad-supported, coronavirus may actually benefit streaming business models, especially video. If a recession comes then entertainment spend will be hit, but significantly less so than leisure. These are worrying times, but at least we’ll be able to binge watch our way through them.

Spotify AND Apple Lead Podcasts – It’s All Down to How You Measure It

midia podcast tracker q4 2020The podcast platform data from MIDiA’s Q4 tracker is in. These are the high-level findings:

  • Apple still leads overall: A recent report showed that Spotify has become the leading podcast platform in the US. MIDiA’s Q4 Tracker data shows that among regular podcast users, Spotify is very nearly but not quite the leading platform in the US, just trailing Apple’s podcast app – though the difference is so small that it could be within margin of survey error. However, when Apple Music is factored into the equation, Apple remains the leading platform.
  • Spotify the leading single platform: In terms of single platforms – i.e. considering Apple Music and Apple’s podcast apps separately – Spotify has quickly established a leading position across all markets surveyed except the US. Spotify is betting big on podcasts, but this bet is as defensive as it is offensive. Spotify knows that its users over index for podcasts – 28% use them weekly, compared to 15% of overall consumers. If it did not go big with podcasts it was always at risk of losing share of ear as podcasts grew, in the same way Amazon lost CD buyers to Apple’s iTunes. It has taken Amazon years to start winning back the spend of its music consumers, but it could tolerate that inconvenience as it makes most of its money elsewhere. Spotify has no such luxury.
  • National broadcasters faring well: Radio broadcasters lost their younger music audiences to streaming. They were not going to sit back and let streaming services then go and steal their older, spoken word audiences without a fight. In many respects, radio broadcasters have a greater chance of being power players in podcasts because their decades of programming expertise will take time for streaming services to learn. With music, they were sitting on the shoulders of a decade of experience learned by Apple’s iTunes. The three national broadcaster apps we tracked (BBC Sounds, NPR One, CCBC Listen) had mixed fortunes, but all have solid adoption. None more so than BBC Sounds, which is the second-most widely used single platform in the UK – a testament to the BBC’s sometimes controversial Sounds strategy. However, one major factor is that broadcaster podcast app users are much older than streaming service podcast users, and indeed of dedicated apps like Acast and Stitcher. This shows that broadcasters are doing a good job of bringing their older audiences over to podcasts but are not yet making podcasts an entry point for younger users lost to streaming.

These findings come from MIDiA’s quarterly tracker survey and will be presented in much more detail in MIDiA’s forthcoming ‘Podcast Platforms’ report.

If you are not already a MIDiA client and would like to learn more about how to get access to MIDiA’s research, data and analysis, then email [email protected]