University of Virginia Darden School of Business professor Anthony Palomba is an expert in media management, an interdisciplinary academic discipline that examines how audiences consume media and entertainment products and services, as well as how entertainment companies compete amid shifting consumer preferences.
During the COVID-19 pandemic, which has ushered in significant changes to both media consumption habits and the manner in which major entertainment companies promote and display their offerings, Palomba has had no shortage of new material to consider.
He recently answered five questions on the rapidly shifting media landscape amid the pandemic.
Q. What is your sense of how media consumption habits have changed for U.S. consumers during the pandemic?
A. This pandemic has forced consumers to recalibrate their entire lives. What matters to them? What doesn’t? I think consumers are getting to know themselves a bit more. Rather than being told what is good by advertisers, they have to consider for themselves what is good.
We are all consumers. We have been stopped in our tracks for nearly an entire year. We have reprioritized our lives. This impinges upon advertisers’ and marketers’ abilities to consistently reach and speak to us.
Anthony Palomba specializes in media management, examining how audiences consume media and how entertainment companies compete amid shifting consumer preferences. (Photo by Stephanie Gross)
Consumers’ acumen over available entertainment and media options has risen quite a bit. Consumers have had more time at home to watch, view, subscribe and try out these options. Marketers must consider how to position entertainment products and services to consumers who have greater market awareness. More consumers have begun to consume digital entertainment, and podcast audiences have swelled while consumers work from home. There is also intensified yearning for immersive escapes into other worlds and realms, which I think has fueled interest in the PlayStation 5.
Consumers are seeking entertainment brands that they can trust. It is astounding to think that Disney + got to 50 million subscribers in five months. It took Netflix seven years to reach that milestone. This business feat is emblematic of consumers’ predominant need to find trusted, feel-good, high-quality brands as consumers reconcile bills against unemployment, salary cuts and other unknowns.
I also wonder: Do consumers enjoy searching for videos and finding the unexpected? With colossal and meticulous algorithms used to determine consumer preferences on streaming video on demand platforms and new [streaming video on demand] program advertisements, the joy of discovery may very well be undermined for consumers. Part of the human experience is discovery. Ensconced in the unknown, will we find something meaningful? Past studies have illustrated that engaging in discovery and exploratory activities is restorative and renews our perspectives about ourselves, imbuing us with confidence and better outlooks of ourselves.
Now, more than ever, consumers need reasons to be lost in discovery.
Q. We have seen significant changes in entertainment offerings in 2020, and recently Warner Brothers announced plans to send its entire slate of 2021 films to HBO Max on the same day they hit movie theaters. What practices might continue long after the pandemic?
A. Going forward, producers and movie studios will be more flexible on business strategies. A movie theater debut should not be a litmus test for movie success. If anything, it can serve as a temperature gauge of how popular a movie is, and how movie executives should exhibit it across other platforms or further monetize it. If there are movies that will likely not perform well in movie theaters, they will be sent directly to streaming services, where they can feature targeted trailers and still galvanize audiences to view them. More movie studios will work to create profit participation agreements such that movie theaters will be able to earn a cut of all premium video on demand purchases on other platforms.
I’m not sure how much audience fragmentation will occur in the movie industry. The television and home video industries are absolutely fragmented, fractured, split, cut, diced, sliced and even spliced in manners no one could have anticipated even 10 years ago. I think blockbusters will still be seen by most consumers. However, movie audiences will see less together after the pandemic. The quality of movies has risen on [streaming video on demand] platforms, and these paywalls will shrink movie watercooler conversations.
