Aug 11, 2020

Axios Media Trends

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Wednesday at 12:30pm ET, Join Axios @Work author Erica Pandey for a conversation on how the coronavirus has accelerated a nationwide shift to e-commerce with Kroger chairman and CEO Rodney McMullen and others. Register here.

Situational awareness: TV and movie execs are facing the chopping block as networks pivot to streaming.

  • WarnerMedia and NBCUniversal are the latest to implement widespread layoffs amid restructurings, impacting hundreds of employees and top executives.
1 big thing: Exclusive ... New Facebook crackdown

Illustration: Eniola Odetunde/Axios

Facebook is rolling out a new policy that will prevent U.S. news publishers with "direct, meaningful ties" to political groups from claiming the news exemption within its political ads authorization process, executives tell Axios.

Why it matters: Since the 2016 election, reporters and researchers have uncovered over 1,200 instances in which political groups use websites disguised as local news outlets to push their point of view to Americans.

  • Many of these sites leverage social media advertising, especially on Facebook, to boost their content.
  • Now, Facebook is ensuring that Pages connected to those groups are held to the same standard as political entities when it comes to advertising on the platform.

With the new policy, Pages on Facebook belonging to news outlets that are backed by political groups or people will still be allowed to register as a news Page and advertise on Facebook, but they will no longer be eligible for inclusion in the Facebook News tab, and they won’t have access to news messaging on the Messenger Business Platform or the WhatsApp business API. 

Be smart: Key to Facebook's new policy is the way that it's differentiating a straight news outlet from a political persuasion operation. Facebook will consider an outlet to be political if it meets any of the following criteria:

  • It's owned by a political entity or a political person (definitions here).
  • If a political person is leading the company in an executive position, such as a CEO, board member, chairman of its board, or a publisher or editor-in-chief.
  • If the publisher shares proprietary information about any of its Facebook accounts or account passwords, API access keys, and/or data about their Facebook readers — like location, demographics, or consumption habits — directly with a Political Person or Entity as they are defined below.
  • If the Page lists a political entity or a political person as its "Confirmed Page Owner" or "Confirmed Page Partner" on Facebook.

Between the lines: The move comes days after Google confirmed to Axios that, come September, it will ban politically-motivated advertisers that disguise themselves as local news websites to promote their political point of view.

  • Earlier this year, Twitter banned all political advertising. According to a Twitter spokesperson, this includes self-identified "news" sites that are funded by a PAC, SuperPAC or a 501(c)(4).

The big picture: The practice of setting up these types of websites has been used by political groups for years, dating back to 2014, and picking up steam during the 2018 midterms.

  • Some of these efforts are done openly with the backing of big donors, while others are done in a secretive, spammy fashion. Both tactics are manipulative, and Facebook's new policies address both.

Be smart: While many of the big local news spam networks initially uncovered by researchers belonged to conservatives, Democrats have been throwing millions at it too.

  • One of the tactics they've been using to potentially skirt election rules is to establish newsrooms as "for-profits."
  • Still, according to Facebook's rules, these "for-profits" would be defined as having "direct, meaningful ties" to a political entity or group due to being majority funded by a progressive nonprofit organization.
  • The biggest and most sophisticated example of this type of website is Courier Newsroom, which is backed by ACRONYM, a 501(c)4 progressive nonprofit organization that invests in multiple for-profit companies in the media and technology space.

Yes, but: Some news sites may fall in a grey area. For example, they could be backed or owned by a person with ties to a partisan foundation, but they are not influenced by that person's political affiliations.

  • Facebook's policy team will ultimately be responsible for making decisions around which news sites would be subject to these policies.

Read the full story.

2. Scoop: NYT exploring a Wirecutter subscription
Data: NYT earnings reports; Chart: Axios Visuals

The New York Times is in the early stages of researching a consumer subscription for its product recommendation site Wirecutter, according to a job description posted on LinkedIn.

Catch up quick: The Times bought Wirecutter in 2016 for over $30 million. To-date, most of the site's revenue has come from affiliate marketing from retailers like Amazon and Walmart when a person clicks from the recommendation site to the retailer and completes the transaction.

  • David Perpich, Head of Standalone Products at The Times, confirmed the effort to Axios.
  • Perpich says the site has experienced a surge in affiliate revenue thanks to people looking for new things for their homes during COVID, like office and cleaning supplies.
  • But over the long term, Perpich argues, "it's better to be in a position of having multiple revenue streams" for the brand.

Be smart: The Times wouldn't be the first company to put this type of content behind a paywall. Consumer Reports, while offering some free content, also offers a $10 monthly digital subscription and a $39 yearly digital subscription.

Details: "Part of why we opened that job description is to start investigating," says Perpich.

  • The subscription, while still in an exploratory phase, would compliment other standalone subscriptions, like Cooking and Crosswords. Consumers could buy it standalone, or as part of a larger all-access package.

Yes, but: Even as The Times explores new subscription services, it's also been quick to sunset ones that it doesn't think will develop any real traction.

  • The Times quietly killed the build-out of its "Parenting" vertical as a stand-alone subscription and folded it back into its core news product earlier. this year, Perpich confirmed.
  • Asked if the company was currently thinking about standalone subscriptions for some of its sub-verticals like "Well" (health) and "Books," Perpich said the Times isn't currently pursuing those topics as standalone subscriptions.

Go deeper: Outgoing NYT CEO Mark Thompson talks about the future of the business with McKinsey's Raju Narisetti and CNBC's Alex Sherman.

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3. Inside NBC News' conventions plan

NBC News

NBC News and MSNBC are doubling down on digital and remote TV coverage of this year's conventions in an effort to bring as much information to voters as possible, while acclimating to the virtual nature of this year's events.

The big picture: The remote nature of the convention presents enormous challenges, but "this forced transition for the conventions will mean the plans for the next four years might become more creative," says Chuck Todd, moderator of Meet the Press and NBC News’ Political Director.

  • "What I’m most curious about is to see how the tone of the speeches change when they don’t have the delegates in person. Whether that changes the mood of these conventions, the impact of these conventions are all things we will learn as we go."  

Details: NBC News will leverage more than a half dozen new digital tools and products to cover the conventions that it didn't have in 2016, including its new 24/7 streaming news service NBC News Now, its new Quibi show "The Report," its Snapchat and TikTok show "Stay Tuned," Apple News and new podcasts like "Into America."

Audience spikes on digital began in March, Kim says. NBC News NOW has roughly 10 million unique viewers and 10 million hours viewed each month.

  • The company has also invested more on new social channels. It has more than 800,000 followers on TikTok across both its' "Stay Tuned" account and its main NBC News account.
  • Kim says that on video across platforms, "we're measuring success by time spent, tracking hours spent watching NBC News Now, Today All Day, etc."

TV coverage will feature anchors covering the conventions remotely for NBC News and MSNBC, while other reporters and correspondents will contribute to television and digital live streaming coverage remotely and on the trail.

Bottom line: "We've never had a convention cycle where the anchor team wasn't in the middle of the action," says Rashida Jones, senior VP of NBC News and MSNBC.

  • "But I don't think we're compromising at all in terms of the quality of expertise ... It will allow us to lean on the journalism more than the bells and whistles of event itself."

Read the full story.

Editor’s note: NBC is an investor in Axios. MSNBC & Axios engage in a weekday sponsored television appearance at 5:55am ET.

4. Trump trounces Biden in campaign site traffic
Data: SimilarWeb; Chart: Naema Ahmed/Axios
Data: SimilarWeb; Chart: Naema Ahmed/Axios

Traffic to President Trump's campaign website is more than 4x higher than Joe Biden's campaign website, thanks in large part to traffic referrals from right-wing outlets like The Gateway Pundit and Citizen Free Press, according to data from SimilarWeb.

Why it matters: The data speaks to the enormous role the far-right web plays in promoting the president's ideas and his re-election campaign.

  • Web traffic to campaign websites is important because it can help campaigns fundraise, sell merchandise, and rally enthusiasm amongst voters.

Go deeper.

5. Video rentals rising as theater windows shrink
Data: PwC and Digital TV Research; Chart: Axios Visuals

The coronavirus pandemic has accelerated a trend of studios pushing more movies to be made available for a premium price rental via a ticketed on-demand deal.

  • "With film fans spending more time at home, we have seen steady growth on both our FandangoNOW and Vudu platforms,” says Fandango Home Entertainment VP Cameron Douglas.

Why it matters: It's a blow to movie exhibitors across the country that were relying on big hits to come exclusively to theaters for at least a few months before being made available to consumers at home.

Driving the news: Disney announced Tuesday that its most highly-anticipated blockbuster of the year, the live-action remake of "Mulan," is heading to Disney+ on Sept. 4 for consumers to purchase for a premium access fee of $29.99. The movie's theatrical debut had previously been delayed four times.

Between the lines: This is Disney's first time experimenting with offering a movie via a premium access price on its streaming service.

  • If successful, Disney executives say this could create a new revenue stream in the form of ticketed videos on-demand (TVOD) — similar to Fandango or Moviefone.

Be smart: Analysts were expecting Disney to rake in $1 billion off the "Mulan" global theatrical debut.

  • It's unlikely Disney will hit that number by pushing the movie to premium on-demand streaming, but the company likely sees the potential for "Mulan" to help bring in Disney+ subscribers as a worthwhile tradeoff.

The big picture: Disney's move into premium on-demand streaming follows similar efforts by rival movie studio Universal, which is owned by Comcast.

  • Universal was the first studio to skip the theatrical window altogether during the pandemic, when it made "Trolls World Tour" and other titles available on-demand for 48-hour rental for $19.99 at the same time as the film debuted in theaters in April.

By the numbers: Data from market research company Parks Associates finds that in Q1 2020, 14% of US broadband households had used a TVOD service over the past 30 days, a five-point increase from the previous year. It predicts consumer usage of TVOD services will increase significantly in 2020 due to the pandemic.

6. Gaming is a massive pandemic winner

Illustration: Aïda Amer/Axios

Video game usage in the U.S. has skyrocketed during the pandemic, leading to record revenues and profits for gaming companies like Nintendo, Epic Games and Electronic Arts, Axios' Kyle Daly and I write.

Why it matters: "We're seeing an acceleration of pre-existing trends," NPD Group analyst Mat Piscatella told Axios. "It's like we jumped ahead two years."

Driving the news: Gaming companies are blowing past analyst earnings estimates and are attracting huge investment interest.

  • Nintendo reported a whopping 428% increase in profits last quarter, driven largely by monster sales of its Nintendo Switch hardware product and its hit game "Animal Crossing."
  • Electronic Arts also blew away analyst estimates for earnings, with earnings per share some 66% higher than Wall Street anticipated.
  • Epic Games, the maker of the hit game Fortnite, said Thursday it raised $1.78 billion at a post-money valuation of $17.3 billion. The funding round includes a $250 million investment from Sony that was announced in July.

The pandemic's role seems to be huge.The number of people who say they are playing video games more now specifically due to the pandemic is up 46% in the U.S. since late March, according to Nielsen Video Game Tracking (VGT).

Go deeper.

7. Tech's reluctant road to taking on Trump

Illustration: Eniola Odetunde/Axios

Facebook, Twitter and other services are starting to take presidential misinformation seriously, Axios' Scott Rosenberg and I write.

Driving the news: Twitter, Facebook and YouTube have now drawn red lines around certain kinds of information — in particular, deceptive messages about voting and inaccurate statements about COVID-19 — and started enforcing them, sometimes even against Trump.

  • It's the first time that Facebook or YouTube had taken steps to fully remove a post shared by the president.

Go deeper.

8. Global crackdown on press freedoms

Illustration: Eniola Odetunde/Axios

Political tension combined with the coronavirus pandemic is empowering authoritarian regimes to crack down on press freedoms.

Go deeper: Coronavirus is being used to suppress press freedoms globally