No one today is surprised that the demand for video content in the pandemic period has increased by leaps and bounds. For example, in France, television viewing time in April was 30% higher than last year, and in August 11% higher (in Poland in April the increase was 16%, but already in August TV viewing time was lower by 3% and in September by 4.4% compared to last year). It turns out that the greater interest of viewers in the offer of TV broadcasters and streaming services, the high supply of content and competition between producers, also have a positive impact on the value of advertising expenditures in this category.
As calculated by analysts of the Zenith media agency in ten key global markets*, this year’s promotional spending of the entertainment video content category will drop by only 0.2% year-on-year.
This shows the exceptional resilience of the industry in comparison to the overall market, whose dynamics in the same countries will be -8.2%. Undoubtedly, this result is mainly due to the development of streaming services, which invested huge money in production last year. Advertising expenditures of video services in the USA in 2019 increased by 142 percent. (Y-o-Y) compared to the growth of TV broadcasters’ spending, which was only +15%. In the UK, streaming services spent 79% more on advertising a year ago than in 2018 and TV stations increased their budgets by 34%. Pay and free TV broadcasters increased their spending mainly due to growing competition from online film services.
It is known that streaming services have recently been trying to conquer the market particularly intensively (with various effects – Netflix gained 300,000 fewer subscribers in Q3 2020 than it had expected), so it is not surprising that thanks to promotional expenses they now want to use natural demand to build a loyal customer base closed indoors and cut off from cinema premieres. Under normal circumstances, this industry has advertised primarily on the Internet, on outdoor advertising media and in cinemas, but due to movement restrictions and the closure of cinema theatres, promotional expenses have moved more to the Internet.
According to Zenith’s forecast, the share of promotional expenditure in the digital channel will increase from 53% in 2019 to 57% in 2020.
However, Zenith analysts predict that the next year will bring stagnation in video producers’ advertising spending. TV advertising expenditure in 2021 will not increase (they will rebound in 2020, when the growth will be 1.3%), so broadcasters will be cautious about promotion, and streaming services will also scrupulously count their budgets after the intensive 2020. The positive dynamics of video industry advertising spending will be observed only in 2022 and will amount to 1.2% compared to 2019.
*The markets covered by this study are Australia, Canada, Germany, India, Italy, Russia, Spain, Switzerland, the United Kingdom and the USA, which together account for 57% of all global advertising spending. (Source: Business Intelligence report – Video Entertainment of the Zenith media agency).