Jul 7, 2020

Axios Media Trends

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Happening today: Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg and other top executives are expected to meet virtually with civil rights leaders today over the growing ad boycott of Facebook and Instagram. What to expect.

1 big thing: Chinese tech and business coverage surges

Illustration: Sarah Grillo/Axios

As tensions between the U.S. and China escalate, more U.S. media companies like The Information, Politico and The Wire China are looking to invest in coverage of the country and its technology and business boom.

Why it matters: "It's coverage you have to have if you're a serious tech or business news operation," says Bill Bishop, author of the Sinocism newsletter.

  • The Information, a business and tech news media company founded by Wall Street Journal veteran Jessica Lessin, is launching a free new weekly Chinese-language newsletter covering Silicon Valley and China’s tech sector for a Chinese-speaking audience. It will be its first non-English language editorial product, with Hong Kong-based Yunan Zhang as the lead writer.
  • At Politico, the company's new “China Watcher” newsletter written by David Wertime. has quickly become one of its top-performing products since launching in May.
  • The Wire China, a digital news magazine dedicated to understanding China's economic rise, was co-founded in April by longtime former N.Y. Times correspondent David Barboza.

Between the lines: Rising tensions between the U.S. and China and recent crackdowns in Hong Kong by mainland authorities will make it harder for international media operations to continue covering the country from within.

  • This will "make the job of doing journalism in the region harder in China and in Hong Kong," says Gady Epstein, The Economist's China affairs editor and a former media editor.

Be smart: For many major news outlets, Hong Kong has for years been the hub for Western news coverage of China, but the new Chinese security law may make it harder for bureaus and journalists to remain there.

  • Epstein speculates that some news organizations could move their Asia bureaus to places like Tokyo, Singapore or Taiwan, but so far, none of the major news organizations with bureaus in Hong Kong have announced plans to move.

The bottom line: The rise of Chinese tech giants like Alibaba, Tencent, Baidu and ByteDance (TikTok's parent company) has also forced Western news outlets to invest in coverage of Chinese innovation and investment.

  • "U.S. China relations are at a decade-long low point, and yet there has never been a Chinese company that has captured the American imagination like TikTok," says Shai Oster, the Asia bureau chief for The Information.
  • "So on one hand, you have this wave of isolationism, but on the other hand, Western VC-backed Chinese companies are bigger than they have ever been."

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2. Big Tech flees Hong Kong

Illustration: Aïda Amer/Axios

TikTok said Monday night that it would pull its social video platform out of the Google and Apple app stores in Hong Kong amid a restrictive new law that went into effect last week, Axios' Ina Fried scoops.

Why it matters: Observers have said the new law forces companies doing business in Hong Kong to provide user data to the Chinese government as well as to comply with censorship requests.

  • Details: TikTok's move comes as many of the big tech companies said they have temporarily paused all responses to data requests from Hong Kong authorities as they seek to understand the law's implications.
  • Yes, but: These pauses aren't seen as anything but a very short-term solution. In the long term, companies will likely face the choice of doing business in Hong Kong the way China wants, or picking up stakes and moving employees elsewhere in Asia.

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3. Conservatives on hunt for their own social network
Data: SimilarWeb; Chart: Axios Visuals

There has been a big uptick in traffic to conservative social media networks like Parler, thedonald.win and Gab over the past few months, according to data from SimilarWeb.

Why it matters: Conservatives are looking to build their own social media platforms, where they can escape from what they feel is baseless censorship of their viewpoints from mainstream social media networks.

The big picture: While some of these apps are experiencing big traffic growth, they still pale in comparison to the size of companies like Facebook, where conservative publishers like Ben Shapiro still have deep-rooted networks and loyal followings.

As of last week, nearly all of the major social media platforms have taken action on accounts belonging to President Trump, his supporters and the alt-right.

  • Those actions prompted calls by conservative lawmakers to ditch traditional social media for new platforms like Parler.
  • As a result, parler.com's average daily traffic skyrocketed by 741.5% in just four days from June 24-28.

By the numbers: Since its start in 2018, parler.com has had several periods of peaking traffic, with a notable peak occurring in June of 2019, when it was reported that there were nearly 200,000 new users, many from Saudi Arabia, who were leaving Twitter because of its censorship policies.

  • However, the most notable peak was this past June, when visits to the site were 2.834M, up 518.5% from May.
4. New: Megamerger at WPP

Illustration: Aïda Amer/Axios

The Glover Park Group (GPG), the DC-based public affairs firm founded by ex-Clinton aides in 2001, is merging with two global advisory giants: Finsbury, based in the UK, and Hering Schuppener, based in Germany.

  • The combined firm, launching in 2021, will be called Finsbury Glover Hering (FGH).
  • Finsbury represents Shari Redstone and her company National Amusements Inc. Glover Park Group represents the NFL, Apple, Bloomberg LP and others.

Why it matters: The deal formalizes a years-long partnership between the three groups, which all focus on different aspects of corporate branding, reputation and advocacy communications and public relations.

  • All three firms used to be fully owned by WPP, the world's largest ad holding group by revenue. The new company is buying back roughly half of its stake from the global ad giant as a merged firm.
  • FGH will own 49.99% of the company alongside WPP, which will retain a majority stake. WPP CEO Mark Read will join the board of the new company.

By the numbers: The combined company will include nearly 700 employees across 18 offices worldwide, including New York City, D.C., London and Brussels.

More on the new leadership team.

5. Sports media's race reckoning

Illustration: Annelise Capossela/Axios

The national conversation about systemic racism has found its way to the sports media world, and companies are being forced to address their shortcomings around coverage of race and their own internal diversity, Axios' Sports Editor Kendall Baker and I write.

Driving the news: Disney announced Monday that ESPN Films will produce an exclusive docuseries on political activist and former NFL player Colin Kaepernick as part of a larger deal with Kaepernick’s production arm RA Vision Media.

  • Former ESPN personality Jemele Hill tweeted that she'll be serving as a producer on the docuseries, after leaving the network two years ago following a dramatic falling out in 2018.
  • At the time, Hill's outspoken tweets about President Trump put the network in the crosshairs of a polarizing debate over sports, race and politics.

The big picture: Sports media has long been dominated by mostly white, male voices. Now, under pressure to resolves years-long shortcomings in both employee diversity and coverage of race, companies are addressing some of those criticisms head-on.

  • Barstool Sports founder Dave Portnoy apologized to staff last week for using terms that offended Black employees.
  • Bleacher Report CEO Howard Mittman has reportedly left the company after being pressed by staff about diversity issues.
  • The Ringer, which is owned by Spotify and run by former ESPN personality Bill Simmons, has found itself on the defense for its lack of diversity.

👀 See the diversity stats.

6. New acting head at Open Tech Fund after purge

James M. Miles has been appointed interim CEO of the Open Technology Fund (OTF), sources tell Axios, with an official announcement expected later Tuesday.

Why it matters: The appointment comes after Michael Pack, who took over as CEO of the U.S. Agency for Global Media (USAGM) last month, removed leaders at OTF and other USAGM-affiliated organizations.

  • OTF helps provide tools for dissidents and journalists around the world to securely communicate.

Pack argues that the leadership changes aren't unusual and that he won't mess with the editorial independence of journalistic institutions at the USAGM, including the VOA.

  • But critics aren't convinced. Miles is not well-known within the internet freedom community, and sources have privately complained that it's unclear what his qualifications are for the role.
  • Miles had previously served as the 40th Secretary of State of South Carolina from 1991 to 2003, and is a labor relations lawyer.

The big picture: Critics charge that Pack is removing established experts in favor of friends, and that he's dismantling a bipartisan board that oversees the OTF that helps it maintain its credibility.

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7. Hamilton is a streaming hit, but Broadway still in limbo
Data: Google Trends; Chart: Andrew Witherspoon/Axios

The debut of "Hamilton" on Disney+ last Friday sent downloads of the app soaring over the weekend.

Why it matters: With theaters closed until 2021, "Hamilton" is the biggest litmus test for whether Broadway will ever be able to successfully transition some of its iconic hits.

By the numbers: Users, eager to finally watch the 11-time Tony-winning show from the comfort of their homes, helped account for a 74% increase of Disney+ app downloads in the U.S. compared to the average four weekends in June, per data from Apptopia.

Between the lines: Disney opportunistically moved up the release by more than a year as the pandemic left viewers with barebones viewing options — major American sports are still paused and new movie and TV show production have ground to a standstill.

  • Google Trends data indicates that interest in downloading ESPN+ when "The Last Dance" was released April came nowhere close to the Disney+ surge this weekend.

Yes, but: Don't expect the success of "Hamilton" to usher in a new era of streaming for Broadway just yet.

  • Experts note that most tapings of live performances have terrible film quality, unsuitable for a streaming audience.
  • And few have the same level of cultural zeitgeist of "Hamilton."

The big picture: The coronavirus pandemic has been the biggest economic crisis to hit Broadway in decades. Even during past recessions, Broadway has rallied, but with theaters physically shut, the theater community has been reeling.

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8. Streaming price hikes make it less of a cheap cable alternative

Illustration: Sarah Grillo/Axios

YouTube TV, ESPN+ and FuboTV all raised their prices last week, even though those packages rely on live sports rights to entertain consumers, and the pandemic has shut down live sports.

  • Why it matters: Streaming services and so-called skinny bundles promised to provide a cheaper alternative to the old cable television package. These price hikes suggest that price advantage won't hold.

The big picture: Every few months, one of the major streaming services lifts its prices, forcing all of its competitors to follow suit. Before consumers even realize what has happened, they're paying double for the same service they signed up for a few years ago, with a few more programs added to it.

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Bonus: Remember sports?
Data: Axios research; Table: Andrew Witherspoon/Axios

It's been so long since we've had regularly scheduled sports, perhaps you've forgotten the best way to actually watch them.

9. U.S. e-commerce adopts Chinese social strategy

Illustration: Rebecca Zisser/Axios

Verishop, the luxury e-commerce site created by former Snapchat Chief Business Officer Imran Khan, expects to sell $50 million worth of gross merchandise volume in 2020, sources tell Axios.

  • It's also launching a social-shopping experience that will include influencers and a personalized feed of content.

Why it matters: Social media apps like Instagram, Facebook and Snapchat have made efforts over the past few years to offer users a better shopping experience.

  • Verishop is doing the opposite by launching a trusted marketplace first and a social media experience around it second.

This strategy has been used by Chinese tech giants for years, and is now starting to make its way to the U.S.

  • Chinese e-commerce giant Alibaba has long included social experiences like live video chat in its Taobao marketplace to build trust between shoppers, merchants and the platform.

Yes, but: Amazon tried to launch a social media shopping discovery feature called "Spark" in 2017, but shut it down in 2019 in favor of a less formal feature called #FoundItOnAmazon.

The bottom line: When Verishop launched a year ago, it had over 180 brands signed onto the platform. Today it has over 600 brands and 12,000 different product choices. By years' end, it will have sold $50 million worth of goods.

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10. 1 fun thing: Drive-in movie theater comeback

Illustration: Annelise Capossela/Axios

Drive-in movie theaters are reemerging as a popular form of entertainment during the coronavirus crisis.

  • Ahead of the July 4th weekend, Walmart announced a partnership with Tribeca Enterprises, which hosts the annual Tribeca Film Festival, to convert 160 store locations into makeshift drive-in movie theaters.

Why it matters: Indoor movie theaters are closed, but people still crave entertainment and a chance to get out of their houses.

Go deeper.