Where We Are Headed
With the fourth quarter underway, we are headed into the 2020 home stretch. Historically speaking, the fourth quarter is usually the best performing quarter with a surge in holiday spending, entertainment consumption, vacations and more. But to be sure, 2020 has been anything but predictable and Q4 is sure to follow suit. We believe overall we'll see action over paralysis as things open up, but what's specifically in store for Q4?
We went straight to the source to find out, curating 11 insightful Q4 predictions from some of our favorite industry minds across leading VCs, Audio Platforms, Content Studios, VCs, Mobile Gaming, Agencies, Digital Pubs and even supplied a few our own.
Brian Morrissey
Ex-President/EIC, Digiday Media
Misc Hot Takes:
Biden wins the election in a walk and talk of regulating and breaking up platforms fades.
More journalists defectfrom big name media companies to strike out on their own. //
News publishers who benefited from the Trump Bump in subscriptions face the Trump Slump as Biden makes politics boring again.
Hernan Lopez
Founder & CEO, Wondery
Media spend will hit an all-time record in Q4 – as increased pent-up demand from advertisers is met with limited supply of quality, brand-safe inventory across the board (almost any media you can think of). Podcasts are definitely a beneficiary of this trend.
John Lustyan
Founder & Managing Partner, illum
Misc. Hot Takes:
Triller goes public via SPAC to further accelerate share gains amidst TikTok's to ban or not to ban vulnerabilities.
Howard Stern re-ups with SiriusXM, dismissing Spotify's advances - all as we predicted 3 months ago.
NFL ratings soar, closing in on 2019 levels (NBA finals ratings were down YoY as much as 70%) as competitive sports clutter wind-down.
COVID-forced budgeting discipline and paralysis slackens, with Advertisers pushing back into expensive, mega campaigns and opportunistic digital initiatives to help shore up a down year, and push into 2021 with renewed momentum.
Rachel Tipograph
Founder & CEO, MikMak
Holiday will start Oct 13 once Prime day strikes. Normally Holiday starts November 1. This means media is about to get more expensive sooner and it means brands will have less time drive full price purchases. Typically sales start Black Friday week - Christmas, but Prime day will pressure other brands and retailers to start sales earlier. The other nuance of this holiday season compared to ones prior is supply chain. There will be more demand for consumer products with less supply, this actually means brands are at a disadvantage to sell more and protect market share. When your products are out of stock, the consumer puts competitive products in their cart.
Michael Duda
Managing Partner, Bullish Inc.
Misc Hot Takes:
Holiday Sales - October will be a record high for many, followed by a down November, flat December.
M&A - The final six weeks of the year will show spike in activity versus past years and Apple will purchase something of note.
DTC SPAC - The first major SPAC DTC holding company will be announced to accrue plateaued DTC brands.
Nick Strann
Senior Strategist, illum
Even with the next generation of video game consoles hitting the market in November, the Nintendo Switch will hold onto its crown as the bestselling console of Q4. That said, unit sales won't be the only metric to watch as the video game business evolves behind pure hardware sales. Microsoft's pricing via Xbox All Access and the positioning of the Zenimax Media acquisition suggest that Game Pass subscriber count will be a priority KPI for the holiday season. Expect to see Game Pass add another 1-2M subscribers by year end - bringing their total count to roughly 17M. PlayStation will respond to the positive reception that All Access has garnered in the press and will roll out a similar payment plan + cloud gaming subscription bundle before EOY but it likely won't pick up steam until Q1 next year.
Bill Durrant
Founder & CEO, Exverus Media
Misc Hot Takes:
Holiday Shopping - Get ready for the longest holiday season ever. With Amazon Prime Day kicking off October 13 and retailers desperate to make their numbers and reinvigorate revenue, the sales will start earlier than ever and won't stop until January. The most digital holiday season yet will see the usual throngs of people fighting over $100 TVs replaced by flash deals and rapid finger clicking online. Except maybe in Florida - there could still be some Black Friday stampedes in Florida.
Media Spending - 2020 could be the perfect storm for the most competitive holiday media market yet. With brands desperate to drive revenue and make the holidays a success, and broadcast media inventory depressed, we could see sellout conditions from primetime TV through Facebook and Google, starting weeks earlier than past years. Expect a highly competitive marketplace.
DTC Brands - The lack of normal media inventory and pressure for brands to deliver in Q4 could dramatically drive up costs of the digital media D2C brands have relied upon for consumer acquisition. Lean heavy against other tactics in case media costs drive CPAs to an unsustainable level.
Sarah Fischer
Media Reporter, Axios
The advertising market is expected to recover next year, but the growth will mostly be in digital ads. Linear ad markets like TV and radio will barely stabilize. In terms of advertising verticals, nearly every industry is expected to start increasing ad spend next year, except for automotive and traditional retail. The decrease in auto ads will have a particularly damaging effect on the local TV ad market, which is already expected to face declines next year thanks to the cyclical loss of political advertising that occurs during odd years, when there are fewer federal elections.
Sunil Dave
VP Business Development, SiriusXM
As traditional sports fans accustomed to attending games or going to bars (e.g., season ticket-holders, die hards) get adjusted to the new norm of in-home watching, premium VR and AI services will have an opportunity to create a new market segment. There is an unprecedented amount of live sports happening simultaneously allowing numerous avenues to test these premium options. In the last 2 years, we've already seen a high profile sport leagues (the NBA) and global events (The FIFA World Cup) experiment with these mixed-media, enhanced at-home viewing experiences, so we expect a perfect storm of circumstances in Q4 to inspire a new wave of VR adoption in live sports focused on two new segments of customers: premium experiences for season-ticket holders and community focused experiences to replicate the sports bar experience.
Chris Heatherly
Games Industry Executive & Advisor
In the short term, mobile gaming continues to thrive as people continue to play mobile games while largely sheltered at home. As we get into 2021 and people (hopefully) begin to return to the real world, that may takeaway from the time and dollars they have been focusing on games. At the same time, COVID has shifted many behaviors and has exposed so many more people to mobile gaming that the halo will likely hang over the industry for a while. However, Apple’s shift away from IDFA for tracking is an existential threat to the industry and could completely upend its business model. Overall, I am cautious on the space until this shakes out.
Andrew Wallenstein
President & Chief Media Analyst, Variety Intelligence Platform
With the COVID climate sure to persist at least thru year-end, Q4 is going to be more of the same across the media sector: Any content that requires the assembly of crowds—movie theaters, concerts, theme parks—will be severely challenged, while streaming consumption of audio and video will remain strong. Biggest question is how sports leagues will resume new seasons now that NBA and NHL have completed current seasons successfully, while NFL and MLB weren't as lucky.
