Hello and happy Friday? At least I think it’s Friday. Who knows anymore?
Today we learned just how brutal it is out there. This morning, the Bureau of Labor Statistics put out the unemployment numbers for April: 20.5 million. That’s a 14.7 percent unemployment rate. In February, in the ‘before times,’ the unemployment rate was 3.5 percent. For perspective, the unemployment rate during the Great Depression:
For media companies (and for the broader working sector, of course), it’s just the beginning.
Disney took a $1.4 billion hit, and the company braces for a rough several months with its theme parks on shutdown. Same with Comcast, which got hit hard on NBCU, which saw a 7 percent dip in revenue to $7.7 billion. On its earnings call, the company told investors to buckle up:
“Our Cable Communications results, while strong in the first quarter 2020, will be negatively affected in the second quarter by the significant deterioration in domestic economic conditions in recent weeks and by the costs associated with our support of customer connectivity as the population increasingly works and learns remotely from home.”
Analysts at MoffettNathanson, as reported by The Hollywood Reporter, lay out the “carnage in pay TV”:
"In the context of over 30 million unemployment claims and estimates for minus 40 percent gross domestic product, it would be unseemly to resort to hyperbole to describe the carnage in pay TV in the first quarter," MoffettNathanson analysts Craig Moffett and Michael Nathanson wrote in a Friday report entitled "Pay TV Catches COVID." "Better that we simply report the numbers. Traditional pay TV subscriptions fell by a record 1.8 million in the first quarter, the worst quarterly result on record, bringing the annual rate of decline to 7.6 percent, also a record."
On the print side, the story is, well, you know.
Gannett reported a net loss of $80 million in Q1, with print ad revenue down 21.2 percent and circulation revenue declined 7.5 percent, both from the year prior. Though Gannett CEO Mike Reed said the company is “cautiously optimistic that the worst is behind us” after steep declines in revenue in late March and early April.
Vanity Fair goes deep into the existential question for New York City tabloids: can they survive? “...newsstand sales have dipped by at least 40%, and there have been days when not a single ad appeared in the print edition (of the NY Post).”
The New York Times reported a boost in digital subscriptions of 587,000. Total revenue increased by 1 percent to $443.6 million, buoyed by subscription revenues, which were up 5.4 percent. However, keeping in line with the last however many years, ad revenue continued to drop. Overall, The Gray Lady saw total ad revenues decrease 15.2 percent; digital ad revenue decreased 7.9 percent and print ad revenue dropped by 20.9 percent.
Ad agencies are also in trouble. Bloomberg has a great visualization of the job losses per industry. In April, there were 452,000 workers, down from 492,000 in March. Here’s adland:
In normal times, media companies would be gearing up for the political season ad blitz. Kantar Media, for example, predicted in February that this year would see $6.5 billion spent in advertising.That probably won’t happen now. But the money will still come in. Politico reported yesterday that President Donald Trump is starting his, with a $10 million spend across tv and digital. Though the story doesn’t say where, exactly. I imagine on the digital front, that money will get poured into Facebook.
Today, former Vice President Joe Biden pulled no punches on this ad going around the social platforms. This comes on the heels of the conservative group The Lincoln Project’s brutal ad called “Mourning in America,” a spin on Reagan’s famous “Morning in America” ad. The group’s spot on YouTube alone has almost 2 million views in four days.
The biggest stories today are the job numbers and the unprecedented, wild ride that is the Michael Flynn case (if you want a fun exercise: take a look at the frame from the Washington Post vs the NYT vs the WSJ; slight nuances there).
But there are two other stories that I wanted to highlight, one historical, one personal.
Today is the 75th anniversary of VE Day. Here’s what the New York Daily News front page looked like on May 8, 1945.
Today is also the 8th anniversary of my grandfather’s death. He was one of the most important people in my life. So much so that we named my daughter after him. I’ve written a lot about him over the years, but when I’m feeling down, I watch him sing his version “C’est Magnifique.”
“When I hear his thick Hungarian accent belt out Beseme Mucho or C’est Magnifique (video below), I’m not only happy to be here – because let’s face it, if he doesn’t get out of Europe, I don’t exist – but reflective on how much he’s seen and what we can learn from our elders. I’ve written before about some of his aphorisms, but the one that always amazes me is his “hope, hope, hope.”
At times it sounds like a defeatist plea, but the more I think about it, the more I believe it’s an optimistic call. That without hope, we have nothing. That hope can be dangerous, but ultimately, is a positive light in an otherwise dark tunnel. That things are, as the lyric goes, C’est Magnifique.”
Have a great and relaxing weekend. Thank you for letting me into your inbox. If you have tips or thoughts about this newsletter, let me know!
(Grateful Dead, Barton Hall, 5/8/77. If you know, you know:)
Some interesting links:
The Great Reckoning, a gut-punch of a piece about what the coming months and years will look like for millions of Americans (Time)
YouTube, Facebook, Vimeo remove “Plandemic” hoax video. Twitter won’t. (Washington Post)
Hollywood CEOs sacrifice pay, but keep big bonuses (Hollywood Reporter)
Facebook giving $16 million to 200 newsrooms (Facebook)
How the NRA is using coronavirus fears to drive up gun sales (Mother Jones)