The unprecedented year that was 2020 has the media industry understandably anxious about what 2021 might bring. With a global pandemic leading to shrinking ad budgets and production delays, and stay-at-home orders shifting audience behaviors in unanticipated ways, media companies face new and constantly evolving challenges. Even as 2021 begins with a new administration in the White House and vaccines rolling out, a great deal of uncertainty about the future remains. Below are a few of the media trends we anticipate will have an impact in the year ahead.
Audiences Will Continue Shift Toward Streaming TV
A major trend the industry will face in 2021 is an audience shift toward direct-to-consumer streaming portals, both subscription models and free, ad-supported TV (FAST) services. But as household budgets continue to shrink and more consumers eliminate cable TV, the market for subscription services from the likes of Netflix, Hulu, and Disney+ will become saturated, further boosting growth opportunities for FAST. Free services like Peacock, Pluto TV, the Roku Channel, Tubi TV, and more, will find new and growing audiences in 2021 – audiences that advertisers will be anxious to reach.
New Distribution Channels Present New Opportunities
Both publishers and advertisers will benefit from FAST’s ability to offer more precise audience targeting. Personalized advertising has been difficult for traditional broadcasters but as the convergence of linear and digital continues into over-the-top (OTT) and FAST, direct-to-consumer platforms will provide an alternative content delivery channel that can offer the addressability broadcasters and advertisers have long sought.
Digital Audio is Here to Stay
Digital platforms had already become the primary listening channel for many consumers but with the increase in remote work, people began spending more time at home and less time commuting, further accelerating that growth. Factor in the increasing popularity of podcasts and the impact of digital on traditional radio becomes even more striking. With experts predicting that working from home will become the new normal, traditional drive-time audiences may never return. That means digital audio is here to stay and will continue to grow in 2021. At the same time, audience appetite for the quality content local radio offers remains high, so radio broadcasters will need to offer more streaming options for their listeners to access that content, no matter how or where they choose to listen.
Underestimate Broadcast TV at Your Peril
Ad-supported streaming TV may look like the big story for 2021, so advertisers distracted by a bright, shiny new object might be tempted to underestimate the value of over-the-air, broadcast TV, particularly local TV. But recent events have growing numbers of viewers turning to local media for information relevant to their communities. The Black Lives Matter movement, the 2020 election and its aftermath, not to mention a global pandemic, all continue to demonstrate the value of local television. Advertisers who underestimate the power of local broadcast TV as a highly effective method of reaching consumers will do so to their own detriment in 2021, especially since its affordability also means local TV provides a significant return on ad spend.
Challenges Accessing Demand Will Continue for Local TV
There can be no denying that the pandemic brought about an economic downturn that hit local broadcasters hard, with many advertisers cutting or eliminating ad budgets. The much-needed influx of political ad dollars was a saving grace, but now that the election is done, those dollars have disappeared. Even as vaccines are deployed, economic recovery is still a long way out and the impact of COVID-19 will continue through much of 2021, meaning local broadcasters will continue to face challenges accessing demand for their inventory. In the coming year, many local TV stations will turn to programmatic marketplaces that offer aggregated demand. Programmatic marketplaces often attract national and direct-to-consumer brands looking to leverage local media to reach target audiences without the expense associated with national campaigns, opening new revenue streams for broadcasters. Accessing this kind of new demand will lead to more competition for local TV’s finite inventory, which can only serve to increase value.