New Media Habits Are All Serendipity

Michael Hedges July 20, 2022 Follow on Twitter

These are great times for economists. A year or so ago public health scientists were getting all the attention, particularly infectious disease specialists. Before that climatologists had starring media roles, however briefly. Their feature may actually be in reprise. Economists are called to explain inflation - increasing prices - and recession - declining economic activity. Sometimes they delve into solutions for both. They use charts and graphs.

Big business consultancy PricewaterhouseCoopers (PwC) employs rooms full of economists to monitor and model all sorts of important trends. Recently their Australian bureau published a report on subscriptions as an element of household spending. Media watchers regularly report on this subject from two specific perspectives. Streaming video subscription trends are currently popular, usually whether or not Netflix will crash. Publishers also watch subscription trends carefully to find new paywall strategies.

According to the PwC Australian Entertainment and Media Outlook report released last week (July 18) the average Australian household in 2021 spent AUS$4,500 (about €3,050) annually on media-related subscriptions. That’s less than 4% of the AUS$116,000 average Australian household income in 2021. Housing, food and transportation costs are, of course, far larger and, given inflation, rising. Providers of media services through subscriptions should be seeing nothing but headroom.

“Where the initial wave of the pandemic may have been characterised by households reigning in spend, coupled with the inability to visit in-person entertainment, the second wave into 2021 saw consumers turn to entertainment and media to help alleviate the boredom of extended lockdowns with a more confident approach to spending,” said the report’s main editor Dan Robins, quoted by Australian advertising and marketing news portal AdNews (July 18). “Digitised entertainment and media has entwined itself in our daily lives, and people are consuming content across more devices, at all times of the day, in all types of places.” The PwC Australia report highlighted the 6.5 premium media subscriptions per household, video streaming and gaming subscriptions continuing to grow. Australia is not a statistical outlier.

Popping the subscription-forever bubble is evidence that media subscribers quickly “disengage,” noted the incomparable Axios media editor Sara Fischer (July 19). Citing a report from subscription tech provider Piano, more than 40% of digital media subscribers “become inactive the day after they subscribe” calling this subset “subscription sleepers.” This implies that people subscribe to access a single show, film, article, tune or game and rarely return to the platform. The return “engagement” is often just to cancel.

Streaming video platform Netflix and publisher New York Times are the epitome of the media subscription business. Mostly due to heavy competition in the category, Netflix global users fell in the last quarter by nearly a million, still about 220 million. It has a major hit with “Stranger Things.” Stock traders ignored the user figures. The New York Times (NYT) continues to place all its marbles in having all the marbles. The publisher expanded into specialty sports with The Athletic, games with Wordle and Spelling Bee as well as cooking newsletters and podcasts galore. And it still covers global news, customized for a subscribers interests. Altogether the NYT has 10 million of them.

The fundamental digital media business model has embraced the transitory, provisional or fleeting. The traditional brick-and-mortar retail model was built on habit, loyalty being implicit. Local publishers and broadcasters had the habit advantage. A plethora of digital platforms, touted as the future, gave media consumers every reason to disengage. Serendipity, even in the best sense, is no longer an occasion; it’s a demand.

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