Report: U.S. Digital Media Consumption Growth Slows

U.S. consumers are projected to spend about 8 hours and 14 minutes daily consuming digital media in 2022, up about 14 minutes (1.9%) from 2021, according to new data from eMarketer. The research firm said the gain is less than during the pandemic when housebound consumers worked from home using laptops and tablets, in addition to consuming entertainment.

The report found that increases in digital media consumption are driven by internet-connected devices such as smart TVs and video game consoles. In 2020 during the pandemic, use of internet-connected devices mushroomed 35.4% to 1 hour and 35 minutes per user. U.S. consumers are projected to spend 1 hour and 47 minutes internet-connected devices this year.

On the flipside, with the pandemic waning, use of desktops and laptops in the home will decline, with the typical user spending six minutes less in 2022 than they did in 2020. The eMarketer report also found that tablet usage will give way to increases in smartphone and smart TV use.

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The report’s author, Sara Lebow, contends that digital distribution will account for an increasing share of time spent with media, totaling 8 hours and 28 minutes in 2024, or 64.9% of time spent with media.

“Digital’s growth is driven by increasing time spent with smartphones and other connected devices, which are making up for losses in the desktop/laptop and tablet categories,” Lebow wrote.

Deloitte Digital Media Survey: Paid Streaming Service Churn Rate High, Especially Among Younger Generations

Paid streaming services are facing challenges. Churn is high, especially among younger people, and younger generations, especially Gen Z, actually prefer playing video games to watching video and spend a lot of time watching user-generated content rather than TV shows and movies.

That’s according to Deloitte’s 16th annual digital media trends survey. The U.S. survey was fielded by an independent research firm in December 2021 and employed an online methodology among 2,000 U.S. consumers. All data was weighted back to the most recent census data to give a representative view of consumer sentiment and behaviors. The survey was also fielded in the United Kingdom, Germany, Brazil and Japan in December 2021 and January 2022. All data from the global markets was weighted to be nationally representative.

The U.S. paid streaming service churn rate averaged 37%, with 33% of respondents both adding and canceling a service and 4% canceling a service in the past six months. The churn rate was even higher among Gen Z and Millennials, with more than half of those respondents either canceling or canceling and adding paid services in the past six months. The trend also held true globally, with average churn in the international territories surveyed at 30% and younger generations more likely to move in and out of services.

While access to original content (39%) and a broad range of content (38%) were the top two reasons U.S. consumers said they were subscribing to paid SVOD services, U.S. subscribers said they’re canceling paid SVOD services due to cost (41%), price increases (30%) and lack of new content (30%).

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While older generations said they prefer watching TV and movies at home, Gen Z respondents preferred video games as their favorite form of digital entertainment. About four in 10 (41%) U.S. consumers said they spend more time watching user-generated video content than they do TV shows and movies on video streaming services — a sentiment that increased to around 60% for Gen Zs and Millennials.

In the United States, 81% of social media users said they use social media services at least daily and 59% said they use these services several times a day, with younger generations (including Gen Z, Millennial, and Gen X) leading the pack on social media usage.

In the United States, 80% of both men and women said they play video games, and half of smartphone owners said they play on a smartphone daily. Gen Z and Millennials said they play video games an average of 11 and 13 hours per week, respectively. Gen X gamers followed closely behind with around 10 hours of game play every week.

“While streaming video on-demand business models look much the same as they did when they were created 15 years ago, social media and gaming companies have quickly evolved their offerings, leveraging technology, and capitalizing on behaviors,” Jana Arbanas, vice chair, Deloitte LLP and U.S. telecom, media and entertainment sector leader, said in a statement. “Social media is free and available anywhere, anytime, offering both passive and interactive experiences with endless streams of personalized content, without the cost of a subscription. And more people are interacting and socializing in game worlds that host millions of users, brands and franchises, and major non-gaming events. SVOD companies aren’t just competing with each other for audiences, they are also competing with different, more social and immersive forms of entertainment.” 

Kantar: Technology Continues to Challenge, Drive Media Distribution

Technology will continue to redefine the media landscape in 2020, creating opportunities and challenges for marketers. According to Kantar Worldpanel’s new global 2020 Media Trends & Predictions report, marketers and media owners will be challenged to develop the skills, engagement models and measurement capabilities to meaningfully engage consumers in the crowded media landscape.

Kantar contrends that while new and evolving media channels will create opportunities, the deluge of digital content distribution will make it more difficult to connect with individual consumers.

The report says marketers will need to navigate the ‘data dilemma,’ meeting consumer demand for relevant, personalized content, without breaching trust and privacy. And as third-party cookies start to crumble, advertisers will need to find alternative measurement solutions. A cookie is created when someone first visits a website that wants to store visitor information.

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Kantar says the technology trends transforming the media landscape next year include:

• 5G finally gets real: The marketing industry will be one of the key beneficiaries of the 5G era, enabling far greater capabilities to reach and engage with consumers but taking advantage of the 5G opportunity will require a significant transformation from marketers.

• The battle of the streaming platforms heats up: New players will see the battle of the streaming platforms heat up, but an increasingly cluttered market will drive subscription fatigue among consumers.

• Turning up the volume: Brands will turn up the volume and find their voice as we enter a new age of audio advertising. Newer audio channels are poised to gain mainstream prominence.

• Content meets commerce: Content and commerce will converge as ‘shopvertising’ evolves from shoppable social to shoppable TV and digital out-of-home resulting in a contraction of the closed-loop marketing cycle.

• The spaces that brands can credibly occupy: Brands get back to reality: Brands will balance their digital presence with more real-world experiences, meaning we could see a slowdown in the pace of digital advertising growth.

• Brands take a stand: Taking the lead from consumers, brands will become more radical in 2020. But they need to ensure their media strategy is aligned with their values and purpose.

• Just grow up: influencer marketing must measure what matters: Influencer marketing will mature as brands start to collaborate more deeply and take measurement more seriously in 2020.

• Get ready to play: e-sports goes mainstream: esports will go mainstream over the next 12 months, presenting lucrative opportunities for the media owners and advertisers that learn the rules of the game.

• Turn and face the change: The trend towards media in-housing: The trend towards media in-housing will continue as more brands build their own teams of digital experts, pushing agencies and advertisers out of their traditional comfort zones, into a new collaborative and exciting space.

• Cookies start to crumble: Changing the recipe: The demise of cookies could leave many marketers in the dark. Advertisers need to prepare now for the new “mixed economy”. Direct integrations between publishers and measurement partners will enable true cross-publisher measurement for the first time.

• The data dilemma: Doing the right thing with data: Faced with impending legislation like the California Consumer Privacy Act in January 2020, privacy ethics will come to the fore and marketers will design personalisation initiatives with a people-first, rather than tech-first, mentality.

• Campaign 2020: Political advertising will create crowding and clutter in 2020, especially in the U.S. media landscape. Brand advertisers will need to rethink their strategy during campaign season.

“Increased advertising and content possibilities, along with the data generated, create a plethora of opportunities for marketers and media owners,” Jane Ostler, global head of media effectiveness, said in a statement. “Other channels, like influencer marketing and the newer audio channels, will face a make-or-break moment; their credibility could be at risk unless they evolve and live up to their promise. Marketers will need to improve their understanding of how different touchpoints effectively work for their brands – online and off.”

Amazon Ups Q2 Prime Subscription Revenue 37%, Online Media Sales 14%

Amazon July 25 said it increased second-quarter (ended June 30) Prime subscription revenue 37% to $4.67 billion from $3.4 billion during the previous-year period.

Subscription revenue includes annual and monthly fees associated with Prime memberships, as well as audiobook, digital movies, e-book, digital music, and other non-AWS subscription services.

The Prime membership also includes free access to Amazon Prime Video streaming service.

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Online store sales increased 14% to $31 billion from $27.1 billion last year.

Online stores revenue includes product sales and digital media content available in both a physical (DVD and Blu-ray Disc) and digital format, such as books, music, videos, games, and software sold on a transactional basis.

In the quarter Amazon Prime Video received 47 Emmy nominations for its original programming, more than double from last year, including 20 nominations for “The Marvelous Mrs. Maisel” and 11 nominations for “Fleabag.”

Prime Video premiered the Jonas Brothers documentary Chasing Happiness, and original series, “Good Omens,” based on the novel by Neil Gaiman.

In addition, Prime Video is set to debut original series “The Boys,” from creators Evan Goldberg and Seth Rogen on July 26, and “Carnival Row,” starring Orlando Bloom and Cara Delevingne, among others, on Aug. 30.