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TV, streaming models may be permanently changed by COVID-19

➤ TV viewing is spiking during the pandemic period, even as content preferences change with the news cycle.

➤ Viewers are enjoying content created at home amid production delays, blurring lines between premium video and social video.

➤ Cable companies are providing free and low-cost internet packages to qualifying households amid the crisis, potentially improving negative customer perceptions.

Vicki Lins is the CEO of the Cable & Telecommunications Association for Marketing, a trade group that takes the role of marketing firm for the cable, broadband, TV and streaming industries.

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CTAM CEO Vicki Lins
Source: CTAM

Those industries are facing new opportunities and challenges amid the coronavirus pandemic as consumers spend more time working and entertaining at home. A recent study by CTAM found that 7% of U.S. households signed up for broadband in the two months since the crisis began, and 17% of those did not have internet at home at all before, a significant boom for a mature business. TV viewing is also up, with the average consumer watching 7 hours of TV daily, up one hour from the pre-pandemic period, according to research and marketing firm Magid.

On the other hand, consumers are tightening household budgets and programmers are having to maintain a steady flow of content despite the pandemic preventing most live action productions.

S&P caught up with Lins to discuss how the coronavirus is impacting her clients in the TV, streaming and broadband space, and to divine the future of those industries in highly uncertain times. What follows is an edited transcript of that interview.

S&P Global Market Intelligence: How has the trajectory of TV and video content evolved amid the pandemic, given increased streaming activity, a troubled advertising market and production halts?

Vicki Lins: The increase [in TV viewing] was enormous and immediate, and there were a lot of new insights. For example, consumer viewing choices and content preferences really swing with their emotional state. Initially what was increasing was the lighter fare — the comedies and romantic comedies and feel-good programming — but later in that first month we saw an uptick in dramas and actions again taking hold.

I wouldn't be surprised if we saw the pendulum swing back to some lighter, more escapist fare, because I think the news has become very overwhelming and intense again.

As for news, there's been a roughly 20% increase in broadcast and cable viewing. [ViacomCBS Inc.'s] Pluto TV has seen an incredible rise in viewership, but a 100% increase in viewer activity in news.

What are you hearing about the impact of pandemic-related production cuts?

The creativity factor has been interesting. Viewers have been showing significantly more willingness to sample newer content and sort of experiment more with what they're watching, so there's an opportunity there for the industry. This raw, authentic field of content we now have out of necessity is really resonating with viewers ages 18 to 49. They like the feel of content produced from home, and I suspect some part of that will be sustained post-crisis because there is an authentic demand for it.

Would you say that is accelerating an integration of traditional premium content and the newer social, user-generated content that younger audiences have been consuming online for a long time?

Yes, that's fair. We've seen the lines between television and YouTube continuing to blur, and this is amplifying that.

While streaming viewership has been growing, advertising has been shrinking, theatrical debuts have been pushed back and customer budgets could come under more pressure. How are your clients expecting the economic contraction to impact the industry?

This streaming model is not yet really grounded in profitability, but it is where the industry was headed anyway, asking, "What do those new customer offerings look like, and how can we work together differently?" That's what I get excited about. What's next? I think we'll come out of this crisis more open-minded about the many different ways we can respond to customers' needs.

One of the things that has weighed down the industry is all the different business models and business deals. So studios are now releasing films on streaming, which was more of a necessity. The reaction to it has been, "Wow, there is a possible way of doing things differently that could work really well," and I think that those types of discoveries are going to lead to really interesting business shifts going forward.

How about the cable and broadband industries?

What consumers are experiencing with broadband right now is very real and it’s only getting better. Just looking at the footprints of Comcast Corp., Charter Communications Inc. and Cox Communications Inc. — just cable's willingness to step up and help their subscribers through this crisis, help low-income families and work-from-home families. It has completely shifted perception of company brands and the perception has improved. It's certainly no secret the cable industry has had a lot of baggage attached to it for a very long time. Everyone seems to hate their cable company, even when they say for the past five years, they've had great service. So now in stepping up and delivering for their communities and their customers in very unexpected ways, [the cable companies] are shaking some of that baggage.

READ MORE: Sign up for our weekly coronavirus newsletter here and read our latest coverage on the crisis here.