Millennial and Gen Z consumers watch less traditional television than their elders, and the pay-TV sector continues to face a seeming death by a thousand cuts with the steady sting of cord-cutting: A projected 6.6 million U.S. households are expected to have canceled pay-TV service by the end of 2020.
Amid this challenging backdrop, what’s a cable programmer like A+E Networks — whose core business relies on cable and satellite affiliate fees and TV ad revenue — to do?
This year, A+E has doubled down on a digital strategy with Snap, aimed at cultivating new fans. A+E Networks, a 50-50 joint venture of Disney and Hearst, says it has found success in reaching new, younger-skewing audiences by expanding its distribution of free, full episodes of TV shows on the fast-growing Snapchat app.
According to A+E, it has drawn millions of unique viewers for unscripted shows, including History’s “Forged in Fire” and “Kings of Pain” and Lifetime’s “Bring It!” The majority of those users are far younger than its average TV viewership: On Snapchat, 79% of the users who watched “Forged in Fire” episodes are under 24, while 73% of “Kings of Pain” and 66% for “Bring It!” have been in that youthful bracket.
“By launching our premium series on Snapchat, we are hitting new, much younger audiences that may not have otherwise been exposed to our shows across linear,” says Morgan Greco, senior VP of digital business development for A+E Networks.
More details on A+E’s Snapchat metrics: History’s “Kings of Pain,” whose two hosts travel the world to get bitten and stung by some of the most dangerous animals on the planet, had over 1 million subscribers less than two months after full eps premiered June 9 on Snapchat. To date, “Kings of Pain” episodes have scored nearly 19 million unique viewers.
In addition, “Forged in Fire,” after full episodes of the sword-crafting competition series premiered in April, has more than 1 million subscribers on the app. All told, the show has had 16 million total unique viewers and about 824,000 unique views. “Bring It!”, Lifetime’s reality show about hip-hop majorette competitions, premiered Aug. 19 and has had 4 million unique viewers and 74.5 million unique views. And “MonsterQuest” (which premiered Oct. 13 on the app to promote specials on History’s linear channel) had nearly 5 million views and 500,000 unique viewers in less than three weeks.
Of course, it’s difficult (if not impossible) to directly correlate digital gains with TV viewership. But Greco says the Snapchat partnership is a win-win: The programmer can get Snapchat users interested in its shows while also generating income from ads sold by Snap against its content.
“As we continue to see growth of our short-form content, we’ve found that viewers are actively searching for more of the long-form content across other platforms, including our linear brands — getting us closer to that holy grail of push-and-pull across various platforms,” says Greco. In addition to Snapchat, A+E distributes free episodes on its own digital platforms as well as third-party services including YouTube and the Roku Channel.
Snapchat in particular has a coveted user base, given its popularity among teens and young adults. In the third quarter of 2020, Snapchat had an average of 249 million daily active users, up 11 million sequentially and an 18% year-over-year increase. Snapchat says it reaches around 90% of all 13-24 year-olds in the U.S. — more than Facebook, Instagram and Messenger combined. Snap CEO Evan Spiegel attributed Snapchat’s Q3 growth to “product innovation and infrastructure improvements.” Content also contributed to the app’s quarterly lift: Total daily time spent by Snapchatters watching shows in the app increased more than 50% year-over-year in the quarter.
“A+E Networks’ series are attracting large numbers on Snapchat — different from our linear audiences and robust in many ways,” says Mark Garner, A+E Networks’ EVP of content licensing and business development. “It’s the fact that legacy brands such as History and Lifetime, in the case of [Snapchat’s user base], matter. You know that the premium content we bring is high quality, and they want that content. They just want it in a different way than perhaps we are serving it through traditional mechanisms.”
The goal, as Garner outlines it, is to try to keep a virtuous circle going: By growing the touchpoints for sampling free A+E content, that ideally will bring new subscribers into the pay-TV ecosystem. That’s important for A+E Networks, which doesn’t have an aggressive direct-to-consumer streaming strategy along the lines of Disney Plus, WarnerMedia’s HBO Max or NBCUniversal’s Peacock.
That said, this digital push-and-pull strategy won’t be a cure-all for the secular declines A+E and the rest of the U.S. pay TV industry face. For Disney’s fiscal year 2019 (ended Sept. 28, 2019), the Mouse House took an impairment charge of $170 million on its equity investment in A+E Networks. Disney cited lower revenue from A+E based on “a decrease in affiliate and advertising revenues and higher marketing costs.”
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