April Market Update
Head of Investment David Turner takes a moment to reflect on the rapid evolution of the local media market in response to COVID-19, and key opportunities for brands on at-home channels.
Words cannot explain recent weeks, but one thing’s for sure: it’s been intense and extremely stressful, but equally as rewarding. No-one really knows when or how we’re going to pop out the other side, but the strength and positivity of everyone in the industry has been amazing. Though we all operate differing businesses, we’re largely under the same pressures and challenges.
So, what does this all mean for the marketplace? There’s too much to cover at this point, but I’ll touch on a few key thoughts and predictions.
As unfortunate as it is, we will see the end of more brands in the market. The first was Radio Sport, then the extremely sad news that Bauer was to close permanently in New Zealand. Every single media owner in New Zealand is working through cost reductions, and doing their best to limit the potential damage, however for some this will not be enough. I can also guarantee the revived talks of NZME buying Stuff are off the table.
Without a shadow of a doubt, the outdoor sector has been worst hit, with no commuters, no shoppers, no students and no travellers. Outdoor contacts have hit an all-time low, and as a result, expenditure has been pulled in favour of in-home media. A resurgence of television viewing is occurring, and audiences are at levels I haven’t seen since the GFC (and, in some cases, exceeding these). News and current affairs are leading the charge, with 1News often peaking around 18 ratings against AP25-54. Not only are these genres drawing massive audiences, this is also having a knock-on effect across entire schedules. Linear TV is currently the place to be if you’re after reach efficiency.
Streaming, of course, remains a large part of many Kiwis’ lives and will continue to grow through this period. Disney has by far outshone all other SVOD providers and absolutely nailed it, bringing forward the release of Frozen 2, showcasing their breadth of family movies (offering some relief to parents), and enticing new subscribers with a 7-day free trail. Although SVOD platforms make up a large proportion of viewing, and these offerings remain ad free, SVOD platforms are not the only ones drawing large audiences. Ad-funded services such as TVNZ On Demand are experiencing significant spikes, so much so that the CPMs on offer in April are lower than we have ever seen before. Get in touch with your Account Management team if you’re wanting to take advantage of these rates.
So much is changing at the moment, and at such a rapid pace, that I’m sure come tomorrow there will be more to talk about. Take care of yourselves out there, and if you ever want to talk about the market and any predictions, feel free to reach out.