The Shape of TV Industry: How COVID-19 impacts TV

We are still in the middle of the pandemic and it is too early to call it quits. Yet the impact on our life’s and particularly also on the TV industry can be felt across the globe. These impacts set off some trends which will prevail for the next couple of months or even years. They will be enforced as longer as the pandemic continues and will shape our industry for a very long time.

When looking at such trends, I focus on three areas that are relevant to us and in each select one major trend of importance: first, a trend that influences consumer behavior and such the audiences that we rely on. Secondly, a significant trend directly in our industry; and third, a trend that shapes our societies at large with implications on the TV industry.

Cocooning Consumers:

In almost all countries that have incurred a longer period of lockdowns, we see that people retracted to their home and went into a state of ‚cocooning‘. This is still true after lockdowns were lifted, as restrictions on public life continue. People spend much more time at home. They work from home, they learn at home and they use TV consequently much more and more different then usual. Viewing patterns have changed. Users now watch all over the day TV and what has been Prime Time might not be that major TV time anymore. For example, viewership of linear channels increased by 21% in UK during lockdown and the usage of VOD /mediatheque catalogues even increased by 45% across major TV markets. 

In addition, people started to use more digital devices and of course, access more and more different streaming services. The increase resulted in extreme growth for streaming services. 

One other aspect of cocooning is that people get more involved with their local community again on a very small scale and in a digital setting. The definition of community as local is hence to be considered a virtual one. Local can be digital, and the key connector in that community is the common interest amongst its members. This can be a common geographical area, a common interest or common demographic amongst other things. 

TV companies need to address these developments by adapting their schedule and offering a more diverse content. The content most relevant these days is one that not only entertains, but that is informative and educacting. Most of all, TV companies must now actively push their OTT / Streaming services into the market. If you do not jump onto the bandwagon now, you not only will miss the train but you will miss the whole trip and be lost.

Finally, Tv companies can get involved with communities and offer them a place to convene, to interact and be informed. Here TV as a media platform will become a defining factor and a new area of growth for the industry by widening its media role.

Digitalization & Disruption in the TV industry: 

I think that this trend is for most of us self-explanatory. The increased usage of digital devices and streaming services in particular triggers efforts everywhere to push for more digitalization. Broadband networks will be further expanded and upgraded, more areas of our life will be digitized. And as the most important effect on our industry: people are more and more used to accessing TV services via a variety of digital devices. Streaming is becoming a common method of TV usage nowadays. The disruption of the TV industry especially with the increased proliferation of streaming services has seen some dramatic developments this year. The year 2020 has leapfrogged the entire development of the streaming market by roughly five years. Just in the first half of 2020 the use of streaming grew by 50% across the globe and Netflix was one of the biggest winners of that growth.

All traditional business models in TV are now under pressure to reinvent, change, adapt and face the new realities. Whoever hesitates now to have more digital services or a streaming platform, will be a dinosaur within two years.

Ad revenue also does already start to switch from linear TV to platforms. The only slight increase in advertising could be for niche channels and locals; people start to watch them more because they seem to be more relevant to them.

One other effect of that trend towards streaming will be a benefit to some and a nightmare for others: the fight for good content will continue and it will be a fierce one. More players will compete for quality content; and if you own content, you are in an advantageous position; if you are not, you better get your grip on a good content library or start to produce your own content.

Revival of Value

The pandemic and related lockdown measures brought up a renewed interest in values in many societies. First of all, people learned again the value of (local) community and to huddle with their (digital) tribe. To be there for each other has become the trademark of many lockdown initiatives. And that is also true for good, old TV. Many TV stations successfully launched campaigns and activities that fostered that sense of community. 

In addition, TV stations that provided solid, reliable information and background documentaries, magazines and discussions could see a tremendous increase in viewership. For instance, in UK TV news consumption grew by 45% and naturally, most of this growth was with BBC (e.g. 94% of UK people used some form of BBC media to get relevant information; and more interestingly, even in the age group of 16-34 olds it was a 87% usage rate).

People value relevance and reliability. This is what traditional media can provide in these daring times, where fake news abound and relevant information is often hard to find. Relevance is a key value for any TV offer: if you stay relevant to your audience, you will survive and sustain (as I already outlined in my article about key factors for a sustainable TV business). COVID will be around for a while and similar pandemics can be expected in the future: people will rely on trusted sources to get information on how their local community is affected.

One other value element that has won more attention is that of Authenticity: during the lockdown many TV productions stood still and could only be conducted in the most basic fashion. TV celebrities broadcasted suddenly from their very home and showed great showmanship by providing entertainment with very basic preparation and facilities. Some of them even showed up without make up, fancy lighting or any other glamour. To have TV stripped to its basics, made it again human and authentic: people could connect with that and found it refreshing and real. The power and value of TV was reinforced by going back to basics. Maybe something that TV programmers should consider more often. 

Finally, we should not forget the value of sustainability. The pandemic shows us in often horrible ways how fragile our world is. In addition, we should not forget about the challenges that the climate crisis is still giving to all of us. The times of crisis are often the times when people, community and organizations excel: it should also be the time when we reconsider how we do business and make every decision now one that has sustainability as a key criteria. Consumers expect from their businesses to look beyond sheer commercial success; they expect them to act responsibly and sustainably.

I am afraid I could only scratch on the surface of these developments and they are only the tip of the iceberg. There is much more granularity underlying each of them and there are a couple of other trends that are also impacting our industry. But by focusing on three key areas only, I hope to provide a rough strategic framework for my clients and everyone in our industry. It shall help to make this crisis a source of innovation and hope for what TV can do and will do.

If you are interested in a more detailed trend assessment or require strategic guidance for your business, do not hesitate to contact us.