Reading the 2018 Tea Leaves for Media & Advertising
With the old year having just passed us by, it’s time to prognosticate on what’s to come in the new year. In years past, my crystal ball has peeked many moons into the future, but today I’ll focus on predictions for the next 12 months, changing things up a bit from other 2018 prediction lists by promising to withhold any mention of AI and Blockchain.
The timing of this list couldn’t be better, given that this week, 200K professionals will descend on Las Vegas for the Consumer Electronics Show. In addition to checking out the self-driving cars and paper-thin TVs, they might also wager a few bucks on the Patriots to win yet another Super Bowl, and if they’re smart, on my half-dozen 2018 prophecies for the world of media.
Netflix rolls out an ad-supported plan…as an alternative to monthly subscriptions allowing viewers access to Stranger Things for less than the cost of a candy bar.
While Netflix subscribers have never had to suffer through…eh, enjoy…ads and there are a growing number of competitive ad-free offerings from Hulu and YouTube, the simplicity and affordability of a plan funded by advertising is attractive to consumers and when executed correctly, will create a new healthy revenue pipe for the company. Unfortunately, this strategy will be short-lived and its second chapter will be outlined in my 2019 predictions when Netflix shutters this plan when the volume of customers is insufficient in generating advertising revenue to account for the lost subscription revenue. Guess those millennials don’t enjoy carpal tunnel syndrome in their ad fast-forwarding thumb.
AMC Networks will be gobbled up by Facebook…as the social media giant continues efforts to become a destination for viewing long-form video content and compete for TV ad budgets.
Over the last 18 months, Facebook has brought on industry leaders tasked with building a content business and also quietly launched Watch. However, there is no quicker way to attracting viewers into a new media consumption environment than to outright own the rights to binge-worthy content like AMC’s Breaking Bad and Walking Dead and its other networks in BBC America and Sundance TV. With a company value that has fallen over 35% in the last two years despite rising revenues over that period of time, the media company is an attractive investment. While its $3.2B valuation is not pocket change, AMC is one of the most affordable options of the various media companies that might find themselves being scanned in the checkout line and provides Facebook an immediate head start in its aspirations to become a new media giant.
Amazon saddles up to the negotiation table…as it starts to compete for distribution rights for one of the major professional sports.
Several major contracts between sports leagues and media companies will be up for renewal over the next several years and with some of the digital giants rumored to be bidding for those deals, the contracts may be unaffordable by those media companies who do not have bottomless pockets. Amazon will move out of its science lab experiments with Thursday night football and will start its bidding for the rights to own distribution of one of the professional sports. Order your favorite team shirt on amazon.com, pick up your nachos and guac at Amazon’s Whole Foods and flip on Prime to watch Monday Night Football.
Barstool Sports rebrands to Barstool…as it makes a serious entry into verticals beyond male humor and sports.
Dave Portnoy has figured out how to wrap sports and daily events in humor and will formally extend that often-NSFW style into political news. Barstool’s disdain for Roger Goodell will not go away, even after the Patriots win their 6th Lombardi trophy.
YouTube doubles down on television opportunities…that lessen the impact of their ad placement missteps.
With marketers holding the giant more accountable, YouTube will moonwalk away from the ad adjacency risks that have come to define digital advertising and will get serious about the TV market as they inject an advertising strategy into their nascent YouTube TV business line.
A major TV player cuts the cord…in an effort to battle back against the media consumption shifts happening amongst its viewers.
A top-10 national cable network shocks the industry by ceasing its carriage agreements with the terrestrial cable, satellite, and telco television distributors and completely shifts to digital distribution through virtual MVPD skinny bundles and its own OTT application. While the plans for this jaw-dropping move had been in the works throughout 2017, it will be catalyzed by the news that over 25% of the viewership of the Pyeongchang Winter Olympic Games happened through non-traditional television, including OTT applications. This move will have this method of TV viewing being considered “traditional” at this time next year.
No matter what happens, it’s bound to be a fun year as there are many changes upon us in the types of entertainment available, the ways in which we consume this media and the companies powering this entire ecosystem.
Opinions above are solely my own and do not express the views or opinions of my employer. (I don’t want clypd getting credit for hitting the nail on the head with all of these predictions)
Follow @jburkejburke to understand more of what the future will bring.