Lab Weekly - 04/22/2022
The future of gaming, and the new brand opportunities that come with it; Plus, analysis on the latest news on NFTs, Netflix, Amazon, and more
Hi there. welcome back to another edition of Lab Weekly. This week, we’ll be diving into the future of video games, specially on how the shifts towards cloud gaming and the metaverse bring new challenges and brand opportunities. In addition, we will also walk you through some of the noteworthy news on NFTs, Netflix, Amazon, and more! Let’s dive in.
The Future of Video Games
The gaming industry is growing rapidly with an outsized cultural influence, yet the shifts towards cloud gaming and the metaverse bring new challenges and opportunities. Here’s what brand marketers need to know about the key trends in the gaming industry and how we think they may aid or hinder brand opportunities in the future.
Outlook 2022: EMEA POV
Our EMEA team details how the four media and innovation trends from our Outlook 2022 report are playing out across their region.
In case you missed it…
The Metaverse ≠ Web3: What Brands Need To Know
The metaverse discourse is being muddled by crypto startups and getting lost amid web3 hype, but innovation-forward brands should not lose sight on why it truly matters
The State of In-Game Advertising: a Recap of IAB PlayFront
A recap on the key trends in video game ads & where the space is heading, including shifting audience segments and gaming ads in the metaverse, as witnessed at the inaugural IAB PlayFront conference.
Netflix Considering To Launch Cheaper Ad-Supported Tier [Variety]
Following a first-time-ever U.S. subscriber drop in the latest quarter, Netflix is quick to reassure the investors of its long-term growth plans by announcing that it plans to launch a cheaper, ad-supported subscription tier within the next two years. The announcement came via CEO Reed Hastings on the company’s quarterly earnings call, who cited competitors like Hulu and HBO Max to support the validity of a hybrid subscription model. He even went on to suggest that Netflix’s ad offerings would be programmatic, which is somewhat surprising given that the ad tech market is experiencing some growing pains as it evolves towards a post-cookie and ATT (App Tracking Transparency) world. It will be interesting to see how Netflix plans to build out its own targeting and sales infrastructure that fully leverages the data it has about its users.
Media analysts and media insiders have long made the cases, both pro and against, on Netflix selling ads. Hastings was famously against the idea, claiming that an ad-supported tier would dilute its brand as a premium streaming service. Yet, facing an over-saturated domestic market as well as an increasingly fierce competitive landscape, even the leading company in the streaming market now seems willing to explore the ad-support model to reduce churn and lure more cost-conscious consumers.
Analyst Ben Thompson penned a prescient post a few weeks ago in which he laid out the main pros and cons of Netflix adding an ad-supported plan. We highly recommend reading it.
Related: Netflix shares crater 25% after company reports it lost subscribers for the first time in more than 10 years [CNBC]; Netflix estimates more than 100 million non-paying households use shared passwords [Variety]; HBO Max gained 3 million subscribers in Q1 [TechCrunch]
Amazon Announces “Buy With Prime” Initiative To Extend Prime Perks [The Verge]
Amazon has announced a new initiative that will let merchants sell goods with Prime benefits on their own sites. Vendors that use Amazon’s shipping services can now add “Buy With Prime” buttons to their sites, which will let Prime subscribers buy from these stores directly while retaining the benefits of Amazon’s subscription service, such as free shipping, next-day delivery, and free returns. For businesses, this initiative also comes with the added benefit of regaining some of the control over the customer relationships they would have lost if the transaction were to happen on Amazon.com instead of their own websites. To the 200 million global subscribers of Amazon Prime, who already mostly shop with Amazon, this further extends the reach of Amazon’s grip on their purchases.
For years, Amazon has been quietly building a shipping operation that rivals UPS and FedEx. This initiative is the latest in a series of moves the ecommerce giant has made in recent years to extend the reach of its logistical operations, as the company aims to leverage its industry-leading capabilities in logistics to gain competitive advantages over rival ecommerce platform services, such as Shopify. Shopping cart abandonment has long been a headache for online vendors, and adding an easy, frictionless checkout option via Amazon to entice purchases presents a solid solution.
Related: Amazon is now shipping cargo for outside customers in its latest move to compete with FedEx and UPS [CNBC]; Sellers who ship through Amazon will see a new 5% fuel and inflation surcharge [NRP]
Spotify Opens Up Video Podcasting To More Creators [The Verge]
After over a year of limited testing, Spotify has announced it is now allowing all creators in the US, UK, Canada, Australia, and New Zealand to upload video podcasts to its platform for distribution. Some analysts jumped at the news to compare Spotify to YouTube, which is still the destination site for most video podcasts (which itself is a bit of an oxymoron, since podcasts are supposed to be an audio medium). I can understand the impulse behind this jump, but it is quite a reach since Spotify is still an audio streaming service at its core, just as YouTube’s core business is in video, despite having audio-only tracks on its platform (usually courtesy of YouTube Music, but sometimes in user-generated content as well). The main takeaway here is that there will be more video ad inventory available on Spotify for brands and advertisers to play with under the podcast category.
Related: Spotify debuts its first 'bookcast' from Dolly Parton [Engadget]; Snapchat now lets you share YouTube videos as a sticker in your snap [The Verge]; iHeartMedia building new NFT network for podcasts [Axios]
Coinbase NFT Marketplace Goes Live For Select Customers [The Block]
Popular crypto app Coinbase is getting into the NFT business by launching in beta its NFT marketplace to select users. While the market is already crowded with platforms for trading NFTs, with OpenSea as the clear winner-of-the-moment capturing an overwhelming majority of the market share, Coinbase is reportedly looking to take on the competition by adding social features, like a comment system (with upvotes and downvotes) and an algorithmic feed. This launch came at a rather interesting time as consumer sentiment on NFTs is starting to turn sour, following a series of highly publicized incidents of hacks and frauds in the space. Nevertheless, it seems like Coinbase has decided an NFT marketplace would be a worthy expansion for its existing user base.
Related: NFT marketplace NEON created an NFT vending machine in the financial district of NYC [Hypebeast]; Star Trek's first NFTs lean heavily on incentives [Engadget]; Norwegian becomes first cruise line to launch NFT collection [MarketWatch]
2021 was a turning point for retailers, with store openings outpacing store closures, according to data from Coresight Research. Major retailers announced 5,083 store openings compared to 5,079 store closures in 2021, after nearly two years of stay-at-home orders, social distancing measures and the rise of online shopping.
EVs accounted for just 3.5% of U.S. vehicle sales in 2021, according to IHS Markit. With more than 65 new plug-in models coming by 2025, however, there's a race to install charging infrastructure to keep up with the anticipated EV growth.
More than half of Gen Z gamers say they feel more like themselves in the metaverse than IRL. A survey from Razorfish and VICE Media found that 57% of Gen Z gamers feel they’re able to self-express more openly in a game than in real life, while 45% say they feel like their identity in a game is a truer expression of who they are.
Cryptocurrency usage will continue its meteoric rise, according to the forecast by Insider Intelligence. Payments made using cryptocurrencies will surpass $10 billion in total transaction value globally for the first time this year, skyrocketing more than 70% from 2021. Meanwhile, the number of U.S. adults who own and use cryptocurrencies for payments will surge by double digits through 2023.
If you find our insights valuable and would like to have a deeper conversation on technology and media innovations, or need to sound smarter in a client meeting or a pitch, please feel free to reach out to our Group Director Josh Mallalieu!
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