Understanding COVID-19’s effect on media and marketing

30-second summary:

• As physical demand shrinks, investment in virtualizing operations is a must, inviting future growth opportunities in varying styles of management and communication. This transition will not occur overnight, but it will not be a lengthy process either.
• Software expenditure in media technology will grow rapidly, potentially outpacing that spent on media hardware. These actions would also raise bandwidth demand on evolving 5G solutions from telcos.
• SMTE Standards for media encoding will likely need to adapt in face of the current crisis. Corporations throughout the world are being forced to downgrade their services in order to not overload consumer bandwidths weakened by the incredible spike in server pressure.
• The early placement of movies on streaming services means an increased pressure on servers, as movies are arriving faster and staying longer on catalogs, requiring increased spatial demand.
• Even excluding esports and Twitch streamers, individual platforms have already seen record-breaking figures, with Valve reporting over 20 million concurrent steam users in March 2020.
• Key measurement companies will need to rapidly rethink their services as Direct-to-Consumer media would strive to wrangle power away. It would help to revisit their products and drive competition with content creators for designing better models leveraging deep domain knowledge.

As the world shifts from in-person meetings to video conferences, and talking at the water cooler to digital lounging, all forms of media consumption have spiked, ushering in a new demand of focused information and entertainment.

Recent studies show people working from home daily consume over three more hours of media than before the COVID-19 pandemic began. These additional hours include online shopping, indicating a potential market adjustment from hands-on experiential purchasing to fully digitalized and remote spending habits.

Recent changes in media consumption primarily heralds changes in four key sectors of the media value chain, indicating an urgent need to re-examine today’s media value chain:

1) Content creation and production

Content creators have been toying with varying cloud enabled media tools for quite some time; on-site to production house file transfer remains the most common use to date.

The recent COVID-19 scare may have temporarily slowed content production, but it has by no means stymied it — the current environment highly supports the productionizing of content along the lines of a software distributed agile model.

The increasing demand for tailored media also indicates a potential cloudification of the entire production value chain alongside a greater need for highly compressed encryption algorithms and heightened crypto security.

As physical demand shrinks, investment in virtualizing operations is a must, inviting future growth opportunities in varying styles of management and communication. This transition will not occur overnight, but it will not be a lengthy process either.

In addition, software expenditure in media technology will grow rapidly, potentially outpacing that spent on media hardware. These actions would also raise bandwidth demand on evolving 5G solutions from telcos.

2) Content processing and distribution

SMTE Standards for media encoding will likely need to adapt in face of the current crisis. Corporations throughout the world are being forced to downgrade their services in order to not overload consumer bandwidths weakened by the incredible spike in server pressure.

Both streaming and gaming segments in the media are rolling back from HD to SD and decreasing packet size to allow the sudden increase in traffic.

Compression remains the best — and perhaps only — option; as server farms begin to see an early retirement, the next generation of computer scientists are forced to tailor their skills towards a mastery of bit-rate reduction and careful juggling between lossy/irreversible compression and minimizing statistical redundancy.

3) Content consumption

Changes in media consumption is perhaps the most obvious effect of the COVID-19 outbreak.

Live events and sports have already been shut down with no clear end in sight, but digital streaming services such as Twitch and Netflix have seen sudden growth as users look for new documentaries and curated shows to binge watch.

Furthermore, as the brakes have been applied to new scripted and unscripted content generation, there is increased reliance on library catalogs available from streaming services to tide us over, making old favorites like Friends, Sopranos and the Office popular again.

We may also begin to see VR and AR rise in the current vacuum, with VR offering  people a close mock-up to escaping their current confinements.

The movie industry is also being forced to reinvent itself, as movie theatres remain empty. Disney+ has already taken strides to embrace social distancing, with many recently released theater movies quickly moving to their subscription services.

The early placement of movies on streaming services means an increased pressure on servers, as movies are arriving faster and staying longer on catalogs, requiring increased spatial demand.

Lastly, the gaming industry remains the secondary forefront of media consumption. As real-life socialization diminishes, digital gaming has entered a stride over the last couple weeks.

Even excluding esports and Twitch streamers, individual platforms have already seen record-breaking figures, with Valve reporting over 20 million concurrent steam users in March 2020.

However, demand has also resulted in temporary loss of connection for gaming console users as servers face overload. To combat this, companies such as Sony have already limited download and upload speeds in North America and Europe.

4) Measurement and impact on ad market

The way we measure multi-channel audience engagement is also going to see a complete 180-degree turn. Current statistical models measuring the intrinsic value of content will have to adapt, as digital growth rises to replace in-person interaction.

Key measurement companies will need to rapidly rethink their services as Direct-to-Consumer media would strive to wrangle power away. It would help to revisit their products and drive competition with content creators for designing better models leveraging deep domain knowledge.

Who would have ever thought TV Upfronts or presentations where the major television networks preview their upcoming fall and midseason series for advertisers would be held over video conferencing?

Digital media ad sales are now projected to grow by 4 percent next year from the expected decline this year, implying hope for revival.

While sectors like Out-of-Home advertising will see strong headwinds with almost 60-70 percent potential reduction in ad revenues and newspapers will see dip between 45-70 percent; the Gaming ad spend will grow by 25 percent, indicating a significant potential increase of platform diversification for social media ad spend.

As we stay together by being apart, media will remain our best tool to link us all together. As we struggle to adapt to a new world plagued by the uncertainties of COVID-19, the media value chain will need to accept the new normal and find new ways to overcome and adjust to the world around it.

The post Understanding COVID-19’s effect on media and marketing appeared first on ClickZ.

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