Oct 27, 2020

Axios Media Trends

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Situational awareness: SimilarWeb, an Israeli-based internet measurement company, has raised $120 million in its latest fundraising round, bringing its total funding to-date to $240 million.

1 big thing: The Lincoln Project's new media business

Illustration: Eniola Odetunde/Axios

The Lincoln Project is looking to beef up its media business after the election, sources tell Axios.

  • The group recently signed with the United Talent Agency (UTA) and is weighing offers from different television studios, podcast networks and book publishers.

Why it matters: The project's plan is part of the new trend of activists developing massive audiences for political influence that they are then able to spin into commercial media success.

  • After the 2016 campaign, former Obama staffers launched Crooked Media, which now boasts a sprawling network of podcasts, streaming video, live tours and events.

The Lincoln Project's group of prominent "Never-Trump" Republicans has transformed from an election-focused advertising PAC into a media company with millions of followers.

  • "As a media business, we're putting a pretty big bet on the idea that they know how to get audiences," says Ra Kumar, a UTA agent representing Lincoln Project.

Details: The group, formed in late 2019, has been approached by several media and entertainment companies and podcast platforms looking to launch franchises from its brand.

  • The company is currently working with a documentarian and a motion picture producer to create a non-fiction film after the election.
  • It's also attracted interest from TV studios looking to work with the Lincoln Project to help develop a "House of Cards"-like fiction series.

By the numbers: The Lincoln Project's current media efforts have grown quickly enough to catch the attention of Hollywood heavyweights.

  • The Lincoln Project podcast, which launched in mid-June, has consistently been ranked as one of the top podcasts on Apple in news and politics. It sees roughly 1.5 million downloads per month, and is on track to hit 2 million downloads in October.
  • LPTV, which streams on YouTube, Facebook and Twitter, includes two shows that have pulled in a total of 16 million views.
  • Its gear store has already fulfilled 70,000 orders accounting for more than $1.8 million in total sales through mid-October.

The bottom line: The company will face new scrutiny as it further explores media.

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2. Pay-TV death spiral
Data: eMarketer; Chart: Axios Visuals

The pandemic will drive cable and satellite TV providers to lose the most subscribers ever, according to the most recent data from eMarketer.

Driving the news: Entertainment giants are beginning to pivot from linear TV t0 streaming, but with that pivot comes messy math.

  • Cord-cutting: At least 3 large media firms expect to lose 50 million traditional TV subscribers in the next five years. per CNBC. AT&T and Verizon both reported sluggish earnings around their media businesses last quarter.
  • Long-tail channels: Networks have discussed further cutting long-tail cable channels that are weighing down bundle negotiations. Some of the "long-tail" channels being floated in reports are household names, like E! and Oxygen.
  • Regional sports: Regional sports networks are struggling to reach distribution deals as the pandemic eats at live sports. Creditors are eyeing a possible debt restructuring of Sinclair's regional sports unit.

What's next: The simultaneous pivot will force even more competition onto the already saturated streaming landscape. Netflix shares tumbled last week after missing modest Q3 subscriber forecasts.

  • HBO Max was able to double what it calls "activations" to its service last quarter, but activations are sign-ups to its service from people already paying for the app via their cable subscription.
3. Pre-bunking rises ahead of the election

Illustration: Eniola Odetunde/Axios

Tech platforms are no longer satisfied with debunking falsehoods — now they're starting to invest in efforts that preemptively show users accurate information to help them counter falsehoods later on.

Why it matters: Experts argue that pre-bunking can be a more effective strategy for combative misinformation than fact-checking. It's also a less polarizing way to address misinformation than trying to apply judgements to posts after they've been shared.

Driving the news: Twitter on Monday said it would start pinning notices to the top of all U.S. Twitter users’ timelines warning about misinformation on mail-in voting.

  • Google on Tuesday morning said it's been pushing to make its core search products and YouTube into hubs for authoritative information about electoral processes and results.
  • Facebook and Snapchat have invested millions in voter information campaigns.

The big picture: Experts say pre-bunking doesn't play into the hands of bad actors who try to weaponize fact-checks as proof of bias.

  • "The benefit of pre-bunking is people see a label or post indicating why the source may not be trustworthy, not the article itself," said NewsGuard co-founder and former Wall Street Journal publisher Gordon Crovitz.
  • Facebook and Twitter recently found themselves tangled in a controversy around making judgement calls when both decided to take swift action against a New York Post story about Hunter Biden.

Be smart: Australian psychologist and professor Stephan Lewandowsky has found that for certain conspiracy theories, like anti-vaccination, pre-bunkings "have been found to be more effective than debunking" after-the-fact.

  • Worth a read: The New York Times' Ben Smith details how media and tech companies have evolved back into their roles as information gatekeepers leading up from the election, a welcome evolution since the 2016 election.

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4. Trump's mixed message has a consistent undertone
Data: Bully Pulpit Interactive; Chart: Danielle Alberti/Axios

President Trump's most consistent message all year has been around "fake news," while former vice president Joe Biden's has been around health care.

  • The big picture: Trump's Facebook messaging has fluctuated dramatically with the news cycle — while Biden's has hewed to health care and and the economy, Axios' Alayna Treene and I write.
  • In the final days of the race, Trump is betting big on court reform, while Biden is spending over a million on voter mobilization, according to an analysis by Axios of data from Bully Pulpit Interactive.

Flashback: The 2018 midterms delivered a blue wave of House and Senate gains, with health care overwhelmingly the top issue Democrats referenced in their digital and TV advertising. Republicans' messaging was all over the map.

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BONUS: 2020 milestone
Data: Advertising Analytics; Note: Political includes all election, political and advocacy advertising; Chart: Axios Visuals

For the first time ever, spending on digital political advertising has slightly surpassed cable. Still, advertising spent on broadcast television — mostly at the local level — reigns supreme.

Between the lines: Facebook's new political ad ban went into effect at midnight. The company says that the ban applies to boosted posts used by smaller campaigns, as well as regular ads used by larger campaigns.

5. Scoop: Artists target Facebook in complaint to policymakers

The Artist Rights Alliance, a non-profit advocating for music creators, has sent a letter to the Justice Department, the Federal Trade Commission and the state Attorneys General of Vermont and California, calling for an investigation into Facebook for refusing to take action on a fraudulent concert on its platform.

Details: The letter, obtained by Axios, asks policymakers to investigate Facebook for "participating in a scheme to defraud cellist Zoe Keating, an unknown number of her fans, and undoubtedly thousands of other working artists."

  • The group, which co-signed the letter with other artist-rights groups like Advocating Against Romance Scammers, Alliance to Counter Crime Online, Freedom from Facebook and Google and Public Citizen, says that Keating was supposed to perform a concert on August 30th, but due to the pandemic the concert was cancelled several months ago..
  • Still, someone reportedly impersonated the artist on Facebook, selling access to a livestream of a fake concert, and Facebook reused to take action on the fraudulent post, the group says.
  • Axios has reached out to Facebook for comment.

The big picture: The issue of music copyright on Facebook and other big platforms has long been an issue.

  • Case-in-point: A group of music organizations recently slammed Amazon-owned Twitch in a letter claiming that the group has "failed to to secure proper synch and mechanical licenses for its recently launched Soundtrack tool," per Variety. Twitch disputes the claim.
  • Yes, but: This claim is more about false commercialization, an issue that's closely aligned with fake news. That's typically something the FTC handles.
6. Facebook and Apple spar over gaming

Illustration: Sarah Grillo/Axios

Facebook on Monday launched its free cloud gaming platform on desktop and Google's Android mobile operating system but said it it couldn't offer the service on Apple's iOS because of Apple's "arbitrary" policies on applications that act like app stores.

Why it matters: It's the latest example of the complex interrelationships among tech's biggest companies, which cooperate with one another in some areas while competing and fighting in others, Axios' Ashley Gold and I write.

  • The company noted that "Even with Apple’s new cloud games policy, we don’t know if launching on the App Store is a viable path."
  • "While our iOS path is uncertain, one thing is clear. Apple treats games differently and continues to exert control over a very precious resource."

The big picture: Facebook and Apple have clashed this year in several areas, with Apple's app store and privacy policies at the center of the dispute.

  • Google and Apple, for their part, continue to compete in the mobile operating system market — but Google also pays Apple billions as part of long-term deals placing Google search as a default on Apple phones.
  • Nearly half of Google's search traffic comes from Apple devices, according to the Justice Department's recent lawsuit against Google.
  • Apple receives roughly $8 billion to $12 billion in annual payments from Google in exchange for making Google the default search engine in its products, per reports cited in the lawsuit.

The bottom line: These complex frenemy relationships offer prosecutors and regulators plenty of evidence to explore as they zero in on each of these companies as a monopoly and potential violator of antitrust laws.

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7. Lawmaker blames tech for local news woes

A day ahead of tech CEOs testifying before the Senate Commerce Committee Wednesday, Committee Ranking Member Maria Cantwell (D-WA) has released of a report blaming tech companies like Google and Facebook "hijacking" local news.

  • The hearing is expected to address Section 230 of the Communications Decency Act, which immunizes platforms from liability for material their users post.
8. RIP Quibi

Illustration: Aïda Amer/Axios

Quibi, the mobile-only video subscription streaming service, is shutting down, the company announced Wednesday. The company said the decision was made to preserve shareholder equity.

The big picture: "The media industry is littered with the carcasses of short-form streaming platforms," The Wall Street Journal wrote, citing failed ventures like Go-90 from Verizon, Fullscreen, from AT&T and the Chernin Group; and Vessel.

By the numbers: Quibi had raised around $1.75 billion in venture capital funding, from Alibaba, Hollywood studios, and financial firms.

  • Investors were told that they'll get some of their money back, even though Quibi still owes payment to some content creators, per Axios' Dan Primack.
  • "The worst-case scenario is around 20 cents on the dollar, per sources familiar with the situation. The best case could be closer to 50 cents, if Quibi can find another streamer to buy some of its content rights," Dan writes.

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