Cord-Cutting Explodes in Q1 as Pay-TV Sector Delivers Worst-Ever Losses

QoQ change in pay-TV subscribers according to MoffettNathanson:
1)
 Traditional pay-TV – ↓ 1.8M
2) 
Streaming pay-TV – ↓ 341K
3) Total pay-TV – ↓ 2.1M

YoY change in subscribers:
1) 
Traditional pay-TV – ↓ 8%
2) 
All pay-TV – ↓ 5%
3) 
Satellite pay-TV – ↓ 14%
4) 
Streaming pay-TV – ↓ 5%
5) 
Cable pay-TV – ↓ 4%

QoQ subscriber change for Comcast:
1) 
Traditional pay-TV – ↓ 409K
2) Broadband – ↑ 477K

Bottom line: Broadband subscribers are more profitable compared to traditional pay-TV subscribers.  The future for companies like Comcast is broadband, targeted advertising, and D2C video services (Peacock, etc.).

More #1: TV Cord-Cutting Hits Record as Coronavirus Shuts Businesses

More #2: Cord-cutting accelerates as empty restaurants, bars ditch cable

More #3: The Impact of COVID-19 on Pay-TV and OTT Video

Roku Streaming Hours Surged 80% in April, Hits Nearly 40 Million Accounts in Q1

Key numbers from Roku’s earnings:
1) 2.9M
 active accounts added in Q1
2) 39.8M total active accounts
3) 73% YoY increase in advertising revenue
4) 48% YoY increase in streaming hours

Quote from Steve Louden – CFO @ Roku:
“We anticipate that our ad business will continue to grow substantially on a year-over-year basis, albeit at a slower pace and lower gross profit than we originally expected for the year.  We believe the behavioral changes by TV ad buyers are likely positive for us in the longer term — and that with more time spent at home, and many households curtailing spending in light of economic hardships, cord-cutting and the shift to streaming will continue to accelerate.”

Roku active accounts (YoY growth):
1) 2017-Q1 – 14.2M
2) 2018-Q1 – 20.8M (↑ 46%)
3) 2019-Q1 – 29.1M (↑ 40%)
4) 2020-Q1 – 39.8M (↑ 37%)

Roku advertising revenue (YoY growth):
1) 2017-Q1 – $36M
2) 2018-Q1 – $75M (↑ 106%)
3) 2019-Q1 – $134M (↑ 79%)
4) 2020-Q1 – $233M (↑ 73%)

Roku advertising revenue per account (YoY growth):
1) 2017-Q1 – $2.56
2) 2018-Q1 – $3.61 (↑ 41%)
3) 2019-Q1 – $4.61 (↑ 28%)
4) 2020-Q1 – $5.84 (↑ 27%)

Roku total streaming hours (YoY growth):
1) 2017-Q1 – 3.3B
2) 2018-Q1 – 5.5B (↑ 67%)
3) 2019-Q1 – 8.9B (↑ 62%)
4) 2020-Q1 – 13.2B (↑ 48%)

Roku streaming hours per account (YoY growth):
1) 2017-Q1 – 232
2) 2018-Q1 – 264 (↑ 14%)
3) 2019-Q1 – 306 (↑ 16%)
4) 2020-Q1 – 332 (↑ 8%)

Roku advertising revenue per streaming hour (YoY growth):
1) 2017-Q1 – $0.011
2) 2018-Q1 – $0.014 (↑ 24%)
3) 2019-Q1 – $0.015 (↑ 10%)
4) 2020-Q1 – $0.018 (↑ 17%)

Video: Roku Unveils TV Ad Buying Solution

More #1: Behind Roku’s Ad-Supported Streaming Strategy

More #2: Roku Relaunches Dataxu As OneView, Marrying Its User Data To The DSP

Extreme Reach: 2020-Q1 Video Benchmarks

Share of impressions by length (YoY share change) according to Extreme Reach:
1) 30s – 77% (↑ 8%)
2) 15s – 22% (↓ 6%)
3) 60s – 1% (↓ 1%)
4) 6s – < 1% (↓ 1%)

Share of impressions for 6s:
1) 2017-Q1 – 0.04%
2) 
2017-Q2 – 2%
3) 
2017-Q3 – 3%
4) 
2017-Q4 – 5%
5) 
2018-Q1 – 3%
6) 
2018-Q2 – 1%
7) 
2018-Q3 – 2%
8) 2018-Q4 – 1%
9) 2019-Q1 – < 1%
10) 2019-Q2 – 1%
11) 2019-Q3 – 1%
12) 2019-Q4 – 1%
13) 
2020-Q1 – < 1%

Share of impressions by device (YoY share change):
1) 
Connected TV – 37% (↓ 12%)
2) Mobile – 33% (↑ 8%)
3) Desktop – 23% (↑ 6%)
4) Tablet – 5% (↓ 2%)
5) Other – 2% (↓ 0%)

Wow: This was the first share drop for CTV since 2018!

Big question: What impact did COVID-19 have on the CTV share drop?

Quick answer: Unclear.  February/March was lower than January, but January was 7% lower than December.

Share of impressions for CTV by month:
1) Oct-19 – 46%
2) Nov-19 – 46%
3) Dec-19 – 48%
4) Jan-20 – 41%
5) Feb-20 – 35%
6) Mar-20 – 36%

Completion rate by device:
1) 
Connected TV – 97%
2) 
Tablet – 89%
3) 
Mobile – 78%
4) 
Desktop –  74%

Average view time by length:
1) 30s  – 26s (87%)
2) 15s  – 13s (87%)

Evening News Audiences Surge Amid Coronavirus. Can The Networks Keep Them?

Broadcast evening news audience in April according to Variety:
1) 
ABC “World News Tonight” – 10.2M
2) NBC “Nightly News” – 9.6M
3) CBS “Evening News” – 6.7M

Total broadcast evening news audience (YoY growth) according to Nielsen:
1) 
April 2019 – 22M
2) 
April 2020 – 31M (↑ 42%)

Great pic: PBS’s Amna Nawaz accomplishes the impressive feat of getting her kids to stand still long enough for this picture to be taken balancing being a mom and broadcasting the news from her house!

Cable news networks by the prime-time audience in April according to The AP:
1) 
Fox News – 4.1M
2) MSNBC – 2.5M
3) CNN – 2.2M

Cable news networks by the prime-time audience in 2019 according to The Hill:
1) 
Fox News – 2.5M
2) MSNBC – 1.8M
3) CNN – 972K

Cable news share of total TV viewership according to UBS:
1) 
March 2019 – 11%
2) 
March 2020 – 20%

Cable news viewership by year according to Nielsen:

Flashback: Fox News’ upper hand next year: The country’s eyeballs, down to districts

Top cable news viewership by district (% of total):
1) 
Fox News – 299 (69%)
2) CNN – 63 (15%)
3) MSNBC – 1 (1%)

More #1: Comcast takes aim at CNN with NBC-Sky global news channel

More #2: Life at CNN: Skeleton Staff, Record Ratings and Vanishing Ads

YouTube’s Push for TV Ad Dollars Is Hurting Its Business Right Now

YouTube advertising revenue (YoY growth):
1) 2019-Q1 – $3.0B
2) 2020-Q1 – $4.0B (↑ 33%)

YouTube CPMs in 2020-Q1 according to PMG:
1) 
Reserve – $30 to $35
2) 
Auction – $5 to $6

Overall, CPMs on YouTube were down ≈ 20% for the quarter.

More #1: Has YouTube Stolen Ad Revs From Legacy TV? Not Yet

More #2: YouTube Isn’t as Big as Most Analysts Thought—What that Meant for eMarketer’s Estimates

Facebook Hits 2.6 Billion Monthly Users in Q1, Cites ‘Significant’ Ad Sales Drop Because of Coronavirus Crisis

Facebook advertising revenue (YoY growth):
1) 
2015-Q1 – $3.3B
2) 
2016-Q1 – $5.2B (↑ 57%)
3) 2017-Q1 – $7.9B (↑ 51%)
4) 2018-Q1 – $11.8B (↑ 50%)
5) 2019-Q1 – $14.9B (↑ 26%)
6) 2020-Q1 – $17.4B (↑ 17%)

Wow: In this environment, Facebook grew advertising revenue 17% YoY.  One area of concern was operating margin dropping from 42% (in Q4) to 33%.

Quote from Mark Zuckerberg – CEO @ Facebook:
“This economic pullback has certainly reinforced for me the importance of maintaining high margins.”

Facebook advertising revenue per user in the U.S. and Canada (YoY growth):
1) 
2015-Q1 – $9.98
2) 
2016-Q1 – $11.86 (↑ 20%)
3) 2017-Q1 – $16.56 (↑ 40%)
4) 2018-Q1 – $23.14 (↑ 40%)
5) 2019-Q1 – $29.69 (↑ 28%)
6) 2020-Q1 – $33.45 (↑ 13%)

Facebook daily active users in the U.S. & Canada (YoY growth):
1) 2015-Q1 – 161M
2) 
2016-Q1 – 173M (↑ 7%)
3) 2017-Q1 – 182M (↑ 5%)
4) 2018-Q1 – 185M (↑ 2%)
5) 2019-Q1 – 186M (↑ 1%)
6) 2020-Q1 – 195M (↑ 5%)

Quick math on Facebook advertising costs:
1) Ad revenue – ↑ 17%
2) Impressions – ↑ 39%
3) CPMs – ↓ 16%

Big question: In light of the drop in CPMs, should we launch a GoFundMe for Zuck?

Quick answer: No. CPMs on Facebook were up 90% last year!

More: This Is the Guy Who’s Taking Away the Likes

Millennials Overtake Baby Boomers as America’s Largest Generation

Big news: Millennials surpassed Baby Boomers as the largest living adult generation last year.

Population by age group (% of total) according to Pew:
1) Millennials – 72.1M (22%)
2) Baby Boomers – 71.6M (22%)
3) Generation X – 65.2M (20%)
4) Silent Generation – 23.2M (7%)
5) Other – 96.2M (29%)

The generations defined:
1) 
Millennials – 23 to 38
2) Generation X – 39 to 54 
3) Baby Boomers – 55 to 73
4) Silent Generation – 74 to 91

Births underlying each generation:
1) 
Baby Boomers – 76M
2) 
Millennials – 62M
3) Generation X – 55M
4) Silent Generation – 47M

Streaming Consumption Rises In U.S. Markets with Early Stay-at-Home Orders During COVID-19

Big question #1: Which audiences are streaming the most?

Weekly hours streamed by demo according to Nielsen:
1) 
P2-17 – 5.9
2) 
P25-54 – 5.8
3) 
P2+ – 4.8
4) 
P18-24 – 3.7
5) 
P55+ – 3.1

Big question #2: Is anyone besides Mr. Screens up past midnight watching the Roman Empire on Netflix?

Quick answer: Yes.  Thanks to the team at SpotX for this chart showing late-night CTV viewership growing in recent weeks.

Flashback: How Coronavirus Is Impacting TV Viewership: The Good And The Bad

Podcast: Live TV vs. Video Streaming During the Coronavirus Pandemic

More: How Coronavirus Changed the Way We Watch, Listen and Play

BIA Revises its U.S. Local Advertising Revenue Forecast Down to $144.3B Due to Coronavirus Impacts

Local ad spend by year (YoY growth) according to BIA Advisory Services:
1) 
2018 – $145.5B
2) 
2019P – $152.7B (↑ 5%)
3) 2020P* – $144.3B (↓ 6%)
4) 2021P – $165.8B (↑ 15%)
5) 2022P – $173.8B (↑ 5%)
6) 2023P – $179.6B (↑ 3%)
7) 2024P – $187.6B (↑ 4%)

Note: The BIA update was for 2020, and we are currently using their original projections for 2021-24.

Local ad spend for 2020 (% change):
1) Original – $161.3B
2) Updated – $144.3B (↓ 11%)

Change in local ad spend by vertical for 2020:
1) 
Politics – ↑ $500M
2) 
Everything else –  $17.5B

Thinking Face on Apple iOS 13.3

Local advertisers spending plan during COVID-19 according to Borrell:
1) 
Less – 52%
2) 
Same – 28%
3) 
More – 16%
4) 
Don’t Know – 4%

Bottom line: The advertisers (44%) who maintain/increase their spending will be in a less cluttered environment with better rates.

Potential marketing advantage:
1) 
Ad inventory – ↑ 60%
2) 
Ad demand – ↓ 40%

Local news viewership increase between 2019-20 according to Nielsen:
1) 
March 4-10 – ↑ 8%
2) 
March 1-17 – ↑ 21%
3) 
March 18-24 – ↑ 57%

Video: The Perfect Marketing Storm of 2020

More #1: It’s All Local Now: The End Of National TV Ad Buying During The Pandemic

More #2: Scripps On ‘Business Equivalent Of Adrenaline

Everyone You Know Just Signed Up for Netflix

Netflix subscriber growth in 2020-Q1:
1) 
Projected – 7.2M
2) 
Actual – 15.8M

Netflix subscribers (% of total):
1) 
International – 112.9M (62%)
2) U.S./Canada – 70.0M (38%)
3) Total – 182.9M

Netflix subscriber growth in 2020-Q1 (% of total):
1) International – 13.5M (85%)
2) U.S./Canada – 2.3M (15%)
3) Total – 15.8M

Netflix subscribers by quarter (YoY growth):
1) 2015-Q1 – 62.3M
2) 
2016-Q1 – 81.5M (↑ 31%)
3) 2017-Q1 – 94.4M (↑ 16%)
4) 2018-Q1 – 118.9M (↑ 26%)
5) 2019-Q1 – 148.9M (↑ 25%)
6) 2020-Q1 – 182.9M (↑ 23%)

Wow: Netflix added 34M subscribers over the past year!

Big question: Did something happen in March???

Sign up growth rate increase between February and March according to ANTENNA:
1) Disney+ – ↑ 108%
2)
 Netflix – ↑ 93%
3) HBO – ↑ 72%
4) Hulu – ↑ 50%
5) CBS All Access – ↑ 23%
6)
 Starz – ↑ 20%
7) Showtime – ↑ 11%
8) Apple TV+ – ↑ 2%

Share of subscribers that also use Netflix according to MoffettNathanson/HarrisX:
1) 
Disney+ – 87%
2) 
Hulu – 81%
3) 
Apple TV+ – 81%
4) 
Amazon Prime Video – 78%

Video: Netflix is making staying at home ‘a little more bearable’

More #1: Netflix CEO Expects Slower Subscriber Growth in Second Half 2020 After COVID-19 Bump

More #2: Netflix’s Streaming Gains May Grow Amid Virus Crisis, Analyst Forecasts