Video-streaming services to see a boom as people stay at home
As the number of people staying at home increases by millions every day around the world due to the COVID-19 outbreak, many industries will be hit extremely hard, and the possibility of scores of businesses shutting down is real.
Most of the world’s economy is contingent around people leaving their houses; now, a ‘stay at home economy’ will see a meteoric boom.
While many of the most popular things that people watch on TV have had their operations cut short – movies and TV series have shut down production, sport competitions have been canned – pre-recorded home entertainment is likely to see a surge in viewing, particularly across digital platforms.
As quarantines kick in across the planet, people will be looking to things to fill the time and satiate their boredom.
And subscription video on demand (SVoD) services like Netflix are well-positioned to benefit in both an increase in engagement and potential new user uptake.
Catch-up TV services and transactional digital video services will also likely see an uptick in users.
Premium digital video viewing behaviour is well established. Around two-thirds of US households now have at least one SVoD service, with this figure around half in the UK.
“Service stacking” (subscribing for more than one streaming service) is now commonplace, with the average US SVoD household set to take around 3 services by the end of 2020, with this closer to 2 in the UK.
Futuresource’s 'Living With Digital' survey suggests that strong momentum in SVoD subscription uptake in 2019 is set to continue into 2020.
The research also suggests most SVoD subscribers won’t cancel their service in 2020, and over one-third of SVoD subscribers say they will take at least one more service in 2020.
This figure skews even higher amongst those with three or more services already, indicating most consumers are not yet suffering from subscription fatigue.
The arrival of newcomer streaming service Disney+ has cemented the service stacking trend.
In response to the drastic increase of viewers staying at home, Disney has added Frozen II to its Disney+ library just a few weeks after its home video release.
This is unprecedented for a title of its magnitude and will undoubtedly attract new subscribers and keep existing monthly subscribers sticky.
Free trials for Netflix, Disney+ and other services amongst current non-subscribers could see a rise, particularly as consumers worry about their personal finances.
The increase in traffic to SVoD services may be offset eventually by halts in production for movies and TV shows, with Netflix and Disney+ both announcing recently their intentions to freeze all production.
With the widespread closure of cinemas around the world, key theatrical releases will certainly be postponed, with many high-profile franchises such as Bond and Fast & Furious likely missing a home entertainment release this year.
Futuresource reports box office values will be severely impacted; the coronavirus crisis in China saw box office down almost USD$2 billion in the first two months of 2020.
With the unprecedented shift in global human behaviour due to outbreak fears, digital entertainment companies, especially SVoD’s, stand to benefit hugely.
It’s likely Netflix, Disney+ and the like will quickly evaluate alternative programming and release options, with offerings designed to one-up their competitors and change the landscape of video streaming.