Today's Media Trends is 1625 words, a 6 minute read.
1 big thing: A nation of news consumption hypocrites
The news and information that U.S. adults actually read doesn't always match up with the topics they claim they want covered more, according to data from traffic analytics company Parse.ly and an Axios/SurveyMonkey poll.
Be smart: It's easy to blame the media for overblown media coverage, but publishers have to respond to what people actually read — not what they say they want.
- An acknowledgement of important topics for coverage doesn't translate to real reading behaviors, which tend to be less holistically considered and more spontaneous.
- It's also important to note that individual topics will vary in interest from month-to-month based on the news cycle.
The big picture: Media companies struggling to find their footing are looking for ways to better connect with consumers. This involves finding new verticals and topics to write about, as well as more innovative ways to cover traditional topics.
Our thought bubble: Successful subscription models are able to sidestep the traffic trap of covering easy-gratification topics for clicks by reaching audiences in more intentional consumption environments — newsletters, magazines and streaming services.
2. News industry takes Big Tech battle to Capitol Hill
News companies that have been lobbying for legislation that makes it easier to negotiate with companies like Google and Facebook will testify before Congress on Tuesday, in the first of several hearings probing the power of Big Tech.
Why it matters: The advertising-supported business model that underpinned journalism for decades has collapsed, leading to the closure of hundreds of newspapers across America.
How it works: Newspapers worry outdated government rules about consolidation and collective action prevent them being able to join forces to compete for their share of digital advertising dollars.
- They're asking Congress for a 4-year antitrust safe harbor that would allow them to work together to negotiate better deals with major internet platforms.
Yes, but: Congress doesn't typically intervene in private negotiations around content leverage and distribution.
- TV distributors and cable operators have for years unsuccessfully lobbied Congress to intervene over rising "retransmission rates," or the rates they have to pay TV networks to carry their content.
Our thought bubble: Forecasts project social media and video platforms will continue to take the majority of ad growth away from newspapers for the foreseeable future.
3. Kids advertisers move dollars away from YouTube
A new report out this morning from PwC finds that by 2021 more children's advertisers will shift their budgets away from YouTube and channels that are non-compliant with children's privacy laws.
Why it matters: Almost a billion kids will be covered by digital privacy laws by 2021 around the world, thanks to new regulations being introduced in Europe (GDPR Kids), India (PDPA) and China (PIS), per the report, commissioned by SuperAwesome, a platform used to power kid-safe technology.
Be smart: This will intensify as regulators globally commit to children's privacy law enforcement. The FTC said earlier this year it will seek to extend liability to individual executives in companies acting illegally.
Yes, but: The report finds many of the major content services that have dedicated, vetted content for children are subscription-based, like Netflix, Disney+, Apple and Amazon.
- "For the media companies, big winners in kids sector are those investing in advertising-based video on-demand services (AVODs), like Viacom," says SuperAwesomeCEO Dylan Collins.
By the numbers: The report estimates that kids digital ad spend will reach $1.7 billion worldwide by 2021, roughly 37% of total kids ad spend. This number projected to grow even further as more investments are made in kids tech.
- To date, YouTube is the largest kids digital entertainment and advertising platform. While YouTube Kids has gained some traction with children, the report finds that the app has had little traction with advertisers to-date.
4. Exclusive: Digiday expands
Digiday, the eleven-year old digital media trade publication, is adding a third brand. The company will launch a "Modern Retail" vertical that will exist across all revenue streams, including advertising, events, newsletters, digital and subscriptions.
Why it matters: Digiday is good example of how a digital media company can scale while remaining niche. "You can be small but be big by staying focused," says Digiday founder and CEO Nick Friese. "We've been a profitable media company over the last seven years," says Friese.
The big picture: Modern Retail becomes the third major franchise within the Digiday family. It follows the 2016 launch of Glossy, a fashion and beauty media brand that focuses on the intersection of technology and fashion and luxury brands.
- The new franchise will be lead by Hilary Milnes, who helped lead Glossy and has been leading Digiday's retail coverage for nearly a year. She will be joined by Digiday retail reporter Anna Hensel, and plans to hire more reporters as the vertical grows.
- From the start it will feature a daily newsletter, as well as two industry summits and a full-day event, as well as digital coverage. Executives plan to build a subscription product around Modern Retail soon.
Be smart: Digiday is a rarity in today's rocky digital media climate. The company was initially self-funded, and hasn't raised any venture capital money. As a result, it's been able to grow strategically at its own pace.
By the numbers: According to Friese, all five of Digiday's business units (advertising, subscriptions, events, awards, custom content) are 7 to 8 figures in revenue.
- The company's subscription business is expected to reach over $2 million projected for 2019 after launching roughly a year ago.
5. A new era for the music biz
Apple is killing its famous iTunes app on the Mac in favor of three new apps this fall: one for music, podcasts and TV.
Why it matters: The move is a symbol of the way music consumption has changed, moving from digital downloads to on-demand streaming.
- Revenues from streaming account for virtually all the revenue growth within the recording industry, according to the Recording Industry Association of America.
The big picture: Over the past year, Apple has aggressively pushed users away from iTunes in favor of Apple Music, which has grown to reportedly surpass Spotify in U.S. users.
- Analysts don't expect Apple Music to make tons of money, as licensing and label and publisher payout fees are expensive.
- The music streaming service will likely strengthen the value proposition for Apple's hardware relationships, just as Amazon's music service is meant to strengthen its retail business through stronger consumer relationships.
Between the lines: The industry has developed standards and benchmarks for popular music around album sales and downloads.
- The New York Times reports artists like Taylor Swift and Travis Scott are trying to bundle free downloads with ticket or merchandising sales in order to game the Billboard 100 list.
- Billboard changed its methodology last year to weigh streaming success more heavily in its calculations, but the now widespread practice of bundling free downloads with merchandise and ticket sales is putting pressure on the group to readjust its calculations.
What's next: The music business is still trying to figure out how artists will be compensated for streaming success.
- Some artist advocates have urged Apple not to cut off downloads entirely, as they provide a way for artists to get paid.
6. YouTube in the hot seat
Google-owned YouTube has taken a lot of heat over the past week for how it polices content, sucking attention away from Facebook after a brutal news cycle around the doctored Nancy Pelosi video.
Why it matters: As Axios' Ina Fried points out, many of the struggles YouTube is facing stem from vague and unevenly enforced rules for taking down videos and "demonetizing" creators.
- "This leads many observers to conclude that the decisions have more to do with how loud a fuss is raised and by whom," she writes.
Driving the news: Ina got to the heart of this point yesterday at Recode's annual Code Conference, when she asked YouTube CEO Susan Wojcicki if she was sorry for the way YouTube handled anti-gay comments made by a popular conservative at a Vox journalist, or if Wojcicki was sorry that people were offended.
- Wojcicki said that she was sorry people were hurt, and that some of the changes YouTube is making separately on hate speech should help more broadly with anti-gay content.
- This response is similar in tone to what Google CEO Sundar Pichai told Ina during an interview that aired Sunday "Axios on HBO," which is the company isn't where it wants to be on policing content, but doesn't have an exact answer on how to move forward.
Go deeper: Ina writes about these issues and so much more in her daily tech newsletter Axios Login. Sign up.
7. Media shakeups
Vice faces a tidal wave of changes that have pundits and analysts wondering about the future of the brand once valued at $5.7 billion.
- Driving the news: HBO canceled Vice News Tonight, putting an end to its seven-year relationship with Vice Media, per The Hollywood Reporter. CEO Nancy Dubuc has hired former New York Post exec Jesse Angelo to oversee news, television and digital at Vice.
- Per Vanity Fair's Joe Pompeo: "In the past five months alone, the company has trimmed its previously 2,500-person global workforce by 10%, canceled its struggling cable channel’s signature Vice Live show after less than two months, shut down certain web brands while consolidating the rest into a single destination at vice.com, and raised $250 million in debt."
- Disney has taken $510 million in write-downs since November on its stake in the company.
CBS and Viacom merger talks will likely reach a critical stage this week as the board of CBS meets to go over the discussions during its regularly scheduled gathering, per Fox Business.
- At this point, the merger seems more likely to happen than not. The big question is who will lead the combined company.
8. 1 fun thing: Mobile brings video games mainstream
Video games used to be played on big screens through expensive consoles on couches in your mom's basement. Soon, when we think of games, we'll think of our phones instead.
The big picture: The future of gaming is one where casual gamers just whip out their phones and play on the go.
Go deeper: Full piece from me and Axios' Michael Sykes.