A file photo shows a billboard advertising a DSTV Multichoice decoder. Providers such as Netflix, Showmax, Amazon Prime Video, and Vodacom Video Play, offering services at a fraction of DStv costs, have received an influx of millions of new and returning customers, says Professor Louis Fourie, a futurist and technology strategist.Photo: Karen Sandison/African News Agency(ANA)
A file photo shows a billboard advertising a DSTV Multichoice decoder. Providers such as Netflix, Showmax, Amazon Prime Video, and Vodacom Video Play, offering services at a fraction of DStv costs, have received an influx of millions of new and returning customers, says Professor Louis Fourie, a futurist and technology strategist.Photo: Karen Sandison/African News Agency(ANA)

Tech News: Covid-19 and the media blues

By Louis Fourie Time of article published May 8, 2020

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JOHANNESBURG - Over the first few months of 2020 the world has changed dramatically and will in some instances never be the same again. 

The Covid-19 pandemic has brought a totally new reality and touched almost every aspect of our lives. As South Africans are adjusting to the new reality of Covid-19 and the subsequent physical distancing to curb the spreading of the life-threatening virus, lifestyle habits are changing. Inevitably, these changes are having a huge impact on business and in particular the media environment.

As people spend more time at home, content providers are caught between increased customer demand, intense competition, and dwindling advertising revenues. One of the tragic results of the lockdown is that the economy is adversely affected and that many businesses are making much less money or have completely lost their income. It is thus obvious that these businesses will spend less on advertising since marketing spend is usually in direct correlation to sales revenue. Businesses need to compensate for lost revenue, with the result that the media is experiencing a tremendous reduction in advertising income. 

Advertising revenue at some television channels has decreased by about 50-70percent, which makes the offering of quality content increasingly difficult and impacts on the long-term viability of broadcasting.

Although daytime television has been growing amongst children staying at home during social distancing, pay television is experiencing a significant number of cancellations of their premium packages mostly due to the lack of live sports that often forms the backbone of the offering. Despite this major loss, DStv in South Africa increased their fees during the first week of April and tried to compensate for the lack of live sport through sport documentaries and repeats of famous matches. 

This behaviour and the inability to fill the content void left by the lack of live sports events, as well the endless repeating of programmes and movies, led to a flood of critique on social media from unsatisfied premium customers. After a very successful #DStvMustFall campaign trended on Twitter at the end of April 2020, DStv decided to include 16 premium channels in the significantly cheaper compact package. As is understandable this resulted in even greater unhappiness amongst subscribers of the very expensive premium package and led to an exodus of subscribers. Research done by Ipsos confirmed the unhappiness of consumers with current content choices they can use to fill the increased hours at home.

This is perhaps the major reason why online media that is streamed from home and on demand is experiencing a time of extraordinary growth. Providers such as Netflix, Showmax, Amazon Prime Video, and Vodacom Video Play, offering services at a fraction of DStv costs, have received an influx of millions of new and returning customers – a growth of 30percent on average.

And then there is also the free sport streaming sites such as Redbull TV, Rugbyonlinestreaming, Kodi, and Reddit. Covid-19 may just be the final nail in the out-dated broadcast model of DStv and the SABC. Linear TV channels have over the years lost their younger audiences, and now they are losing their older audiences instead of rekindling relationships in a time of need. Once viewers discovered the benefits of on demand television at a fraction of the cost, their behaviour may change permanently. Expensive pay television, such as DStv, will find it increasingly difficult to compete with agile media such as YouTube that presents content that taps into the cultural zeitgeist. At a time of heightened audience needs, the channels that successfully capture relevance and virality will survive.

Similarly, the music and live entertainment industry has been severely impacted by the Coronavirus since it is intrinsically linked to large audiences and live experiences. Interesting is that unlike video streaming, music streaming is down significantly. This can perhaps be ascribed to the fact that music streaming is largely an individual activity, which people enjoy while they are exercising or commuting. Confinement has changed this and the listening volume dropped in several countries between 10 and 25percent. The Deezer streaming platform confirmed the changed behaviour since their peak streaming time changed from the morning rush-hour time around 7am to somewhat later between 9am and 10am.

Music Business Worldwide indicated that global streams from the popular Spotify’s Top 200 chart dropped with 11percent to 226 million in the third week of March when many countries over the world implemented social distancing and closed shops, pubs, universities, and schools. The decrease in the number of listeners and diminished advertising will make the future enormously difficult for the music streaming industry.

But it is not all doom and gloom. Spotify reported an increased use of its Covid-19 Hub, while major radio stations reported a much larger streaming of programmes and in particular news. Interesting is that an increasing number of people are using smart speakers, such as Alexa, for streaming.

The publishing industry also took a hard blow, since stores had to close down, events had to be cancelled, and book releases had to be postponed. However, e-book sales are booming and some online sellers experienced a 75-200percent increase in activity. Some of these can certainly be attributed to the downloading of schoolbooks for home schooling. Many consumers discovered ebooks for the first time, which could easily change the future of printed books, magazines and newspapers.

Furthermore, the selling of printed magazines and newspapers in the shops have decreased due to the dramatic decrease in shoppers. This, together with dwindling advertising income, dealt the beleaguered medium a tremendous blow and resulted in the closing of established publications with a history of decades, such as Caxton (Bona, Country Life, Food & Home, Garden & Home, Rooi Rose, Your Family, Vrouekeur, People, Woman & Home, and Essentials) and Associated Media Publishing (Cosmopolitan, House and Leisure, Good Housekeeping and Women on Wheels). It indeed seems to be the beginning of the end of traditional print media.

In contrast, a 48percent growth has been experienced in social media with worldwide users currently on 3.81 billion (49percent penetration). Twitter is increasingly being used as the primary news source, while Facebook and Instagram are ways to remain socially connected during a time of physical distancing. Video calling is taking centre stage and since WhatsApp increased the number of participants in their group chat to eight people, WhatsApp is continuing to grow as business and news tool. Unfortunately, unlike traditional media, social media is easily misused for the spreading of fake news. 

Radio listenership is also decreasing since people are working from home and are travelling much less. In fact, all media that rely on reaching their audience while travelling have lost their audience, whether radio commercials, billboards or advertising in taxi minibuses.

As consumers change their habits due to Covid-19, many of these might become long-term habits. Everyday habits shape the media sector and as those habits change, organisations would do well to modify their offer to meet new tastes for on-demand and personalised content. Media companies will have to keep their finger on the pulse of consumers and make timely adjustments. Those who are not able to do so will fade away.

The media brands that will survive the pandemic will be those that connect with audiences during these difficult times, but also are able to demonstrate their continued relevance and ability to fulfil more enduring needs in a disrupted world.

Professor Louis C H Fourie is a futurist and technology strategist [email protected]

BUSINESS REPORT 

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