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This year’s shifts in the television landscape might not be as seismic as those that occurred in 2020, but the transformation has just begun.
Trent Joaquin for Adweek

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By Jason Lynch

41 mins ago

Where We Were

As 2020 began, the television industry was focused on launching new streaming services to keep pace with Netflix while simultaneously trying to stop audiences from abandoning linear TV. A year later, everything has been transformed as a result of Covid-19. And yet, at the same time, nothing has really changed.

Yes, the pandemic supercharged and compressed the industry’s evolution from several years into a few short months. But 2021 kicks off in a similar way as 2020 did: Those same companies are prioritizing their streaming services, in part to grab the audiences that fled linear TV during the pandemic.

Initially, quarantining consumers watched more TV throughout multiple dayparts, but those new patterns changed as Covid-19 shut down live sports and paused television production. That throttled the linear TV content pipeline, pushing audiences toward streaming—and many never looked back. Meanwhile, companies such as NBCUniversal and ViacomCBS lost more than a quarter of their ad revenue in Q2 due to the Covid-19 fallout.

Where We Are Now

By summer, something astounding happened: The biggest media companies, reeling from their hefty ad revenue losses, joined the streaming stampede. NBCUniversal, WarnerMedia and Disney all radically reconfigured their organizations to put their streaming platforms at the center, leaving no question as to their priorities for the future.

“Consumer behavior has shifted permanently,” explains Linda Yaccarino, chairman, global advertising and partnerships, NBCUniversal. As a result of her company’s overhaul, where executives now oversee content for multiple platforms, “it is perfectly organized to develop and distribute relevant content to them, no matter what the screen.” After all, Yaccarino says, “we can’t transform the industry without transforming ourselves and our organization.”

And the transformation has just begun. This year’s shifts in the television landscape might not be as seismic as those that occurred in 2020, but it will still be a wild ride.

Where We’re Going

Most insiders are quietly looking to fall 2021 as the time when the industry will start to more fully emerge from the pandemic, assuming most people are able to get vaccinated by the summer.

“By the third quarter, the underlying assumption there is that the vaccine will be sufficiently widely distributed and that something passing for normalcy returns,” says Brian Wieser, global president, business intelligence, GroupM. In GroupM’s global end-of-year forecast, the company said it expects the ailing travel and theatrical advertising categories to finally be back at full steam by then, capitalizing on pent-up demand.

While GroupM forecasts that total TV advertising in the U.S. declined by 15.1% in 2020 (excluding political advertising) and will grow by 7.8% this year, national TV will see “tepid to negative” trends when normalcy returns, says Wieser, with a growing share of spending going to streaming platforms such as Roku and ad-supported streamers including Hulu and Pluto TV, which are “contributing to the erosion of traditional ad-supported television.” But digital extensions and related media, including advertising associated with traditional media companies’ streaming activities, will grow 23.2% this year (after a 7.8% increase in 2020), which further explains the shift to streaming.

Streaming will transform linear TV, from content to ad loads

The impact of last year’s streaming-centric media company reorganizations will be more fully felt in 2021, as the top-shelf scripted programming once earmarked for each company’s cable networks will now be almost completely funneled to their respective streaming platforms, like NBCUniversal’s Peacock, WarnerMedia’s HBO Max and ViacomCBS’ Paramount+ (its upcoming rebranding of CBS All Access, which will now be the focus of its scripted efforts).