It is never easy to sum up the state of play in the media sector. With its diverse subsectors, it can seem to be thriving and suffering simultaneously as global economic and consumer trends make their mark. If the digital environment gained increasing importance during this pandemic, the print world faced many losses, therefore, they have to reconstruct and find a new way to prosper. At the beginning of 2020, the specialists predicted for this year at least a 5% increase of the Romanian media market, in line with the growth of 2019, thus exceeding the threshold of 500 MEUR. The industry has been growing steadily since 2013, and it seemed to be on an upward trend.
„In the meantime, advertising revenues have decreased because the marketing budgets were severely cut back. The companies which temporarily stopped their activity (production, automotive), or the ones that registered a significant decrease of the activity (tourism, transports) or a financial impact (banks) gave up the advertising services during this period for the products affected by the restrictions imposed during the state of emergency. The decrease in advertising consumption in the second quarter was significant, following the industry trend. The relaxation of restrictions, the resumption of production and tourism, but especially the experience gained by advertisers in the crisis of 2009 will ensure a relatively rapid return to the previous year market levels.”, mentioned Vasile Andrian, Partner, Audit & Assurance Services, Mazars Romania.
The digital revolution - the antidote to print and outdoor advertising
The digital environment has grown in recent years through the development of social networks (Facebook, Instagram, LinkedIn, Twitter, or Tik-Tok), the Youtube video platform, high-speed internet, and high-performance mobile devices, which have allowed an increasingly fast transfer of content and at the same time the creation of a less processed one. It is not surprising that advertising in the digital environment has followed the same trend, developing spectacularly in recent years, including in Romania. Facebook and Google are the main players in the online advertising market in Romania, due to a large number of users and the high adoption rate.
Probably the most affected by the pandemic, the print was on a downward slope before the arrival of COVID-19, and at the local level, more and more publications are disappearing or moving entirely online. Major sporting events, such as the European Football Championship or the Tokyo Olympics, which would have been a breath of fresh air for the written sports press, have been postponed to 2021. Moreover, most of the sporting events taking place both nationally as well as internationally (football championships, tennis tournaments, basketball, handball, etc.) were suspended, further deepening the crisis in print.
„As digital engagement rises in Romania, the reach of print media is shrinking fast. Based on the data for the Global Media Intelligence Report, compiled by Publicis Media and Global Web Index, in Q1 2019, over half of internet users had read a print newspaper in the prior month; a similar number had read a print magazine. In Q1 2020, the share reading printed news plunged by 10.3 percentage points, to 41.7%. Magazine penetration fell by 7 percentage points, to 46.3%.”, mentioned Teddy Dumitrescu, CEO, Publicis Groupe Romania.
If we talk about the outdoor advertising (OOH), whether we are talking about the street, indoor (present in malls, office buildings, stations or subway trains, buses) or the one present on digital screens, along with the legal aspects, emerging trends have appeared, such as 3D projections or interactive virtual reality.
„The sudden appearance of the SARS-CoV-2 virus forced a large part of the population to work from home and the companies had to immediately find solutions for a quick transition to the online environment. Digital tools played a huge role in many business communities and they were probably one of the biggest advantages that we had on our side. Of course, the reduction of advertising budgets has also affected the digital environment, but much less than the others. Due to the increased use of the online environment, especially during the state of emergency, some of the remaining advertising budgets were redistributed to digital, to the detriment of other media, especially outdoor or print.”, mentioned Iulian Condrea, Senior Manager, Audit & Assurance Services, Mazars Romania.
Streaming - the present and the future of content consumption
The state of emergency, that kept all of us at home, has changed consumer behavior and preferences. Staying at home all day, as well as being curious and experiencing different emotions regarding the events of the pandemic, led to an increase in TV consumption, not only in prime time, in the evening, when people returned home, but throughout the day.
On the other side, of streaming services, the imposed or voluntary social distance has propelled important players, such as Netflix, Amazon, or HBO on the very short list of possible activities, benefiting from a considerable influx of new customers or even the return of existing ones.
„Romanians are for sure citizens of the world, and increasingly so each year. Subscription video-on-demand (SVOD) services in Romania posted a major gain in viewers, as overall penetration rose from 52.3% last year to 60.5% in H1 2020. Early-adopter groups remain at the forefront of SVOD; penetration rates were far greater among internet users ages 16 to 24 and 25 to 34, at 79.5% and 70.6%, respectively. Also worth mentioning, smart TVs saw a similar jump, as ownership in Romania rose from 51.0% in H1 2019 to 56.3% in H1 2020 - surpassing the level in Poland, for example.”, added Teddy Dumitrescu.
Online streaming platforms are also the ones that save business events and greatly increase competition between players, intervening with innovative elements such as creating your own avatar, the presence of an interactive whiteboard, real-time illustrations, gamification elements, or even artificial intelligence-generated recommendations with data entered when creating the profile.
New business models to support a changing consumer behavior
We are facing a difficult reality, but the long-term image could include a fundamental reshaping of consumer habits, as people are increasingly willing to try new experiences. As are customers who can find their way back to traditional news channels after rejecting online platforms (some of which have been prone to distributing fake news).
Radio consumers with preferences for certain programs, stations, or who simply prefer radio over TV, have been able to continue their daily routine of listening at home, instead of listening in the car, public transport, or in the office. In addition to the frequently reported real-time pandemic news, the entertaining moments came in second regarding radio topics, which restructures broadcast priorities. There is also a reduction in advertising budgets, as in the case of television.
Over the last decade, the media sector has proven to be resilient. As new players entered the market, the stable ones modified their product to keep up with customers eager for on-demand and customized content and dependent on the surrounding trends. Those who could not do so disappeared. While the pandemic is creating a new kind of disruption, media organizations - and the teams that lead them - are already experienced in finding new routes to market and have shown ingenuity in keeping their customers connected. As a result, the sector could learn from its recent history to consolidate its future.
Emilia Popa, Head of Marketing and Communication, Mazars Romania
Emilia.Popa@mazars.ro | +40741.111.042
Mazars is an internationally integrated partnership, specialising in audit, accountancy, advisory, tax, and legal services*. Operating in over 90 countries and territories around the world, we draw on the expertise of 40,400 professionals - 24,400 in Mazars’ integrated partnership and 16,000 via the Mazars North America Alliance - to assist clients of all sizes at every stage in their development.
In Romania, Mazars has 25 years of experience in audit, tax, financial advisory, accounting and payroll, and HR advisory. Our strength lies in the people we work with - the local team has 230 professionals.
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