What Effect is Coronavirus Having on Streaming Services?
Written by: Stephanie Bariatti, SMB Media Marketing Consultant
Once we were told to stay home, it was pretty obvious that streaming services would benefit from our lockdown. At our house, we’re still trying to diligently WFH and homeschool our children, but I’d be lying if I said Netflix, Disney Plus and HULU haven’t been seeing more action than the good ol’ pre-quarantine days.
But, we’re not the only ones. Lots of folks are streaming to pass time, kill boredom and distract themselves from the stress of this pandemic.
The data is, in fact, showing an increase in time spent streaming. Netflix, for instance, had an unbelievable 1st quarter this year. The streaming behemoth added a net 15.77 million subscribers in the first quarter of 2020, which shattered quarterly records and surpassed all expectations. Netflix said it had 182.9 million paid subscribers globally as of the end of Q1, up 22.8% from a year earlier. Originals such as Tiger King, Love is Blind and Season 3 of Ozark have been among the most watched titles over the past couple of months.
Meanwhile, Disney Plus is also showing its popularity, having signed up 50 million paid subscribers worldwide as of early April — just five months after its initial launch. 21 million of those subscribers only signed up since the beginning of February. The 50 million figure is well ahead of Disney’s own forecasts, as well. When the company unveiled its plans to investors a year ago, they stated a goal of 60 million-90 million global subscribers by the end of fiscal 2024. They may very well reach that target four years ahead of schedule. This is undoubtedly a bright spot for The Walt Disney Company, who is suffering losses due to their theme park closures, delayed production/debuts of theatrical releases and lack of sports programming on ESPN.
Interestingly, that “no sports” factor may be driving more people toward streaming services and CTV in general. “Cord-cutting” has become a phenomenon over the past several years, as cable/satellite subscribers attempt to save money by switching to digital streaming services. However, many sports fans have hesitated to follow suit. Some sports and teams are not accessible for viewing on digital platforms. And subscriptions to league bundles or add-ons can be pricey. According to an August 2019 study, sports viewers were more likely to subscribe to traditional pay TV service and less likely to cut the cord than sports nonviewers. However, with all professional sports officially on the backburner, these sports fans may find themselves making the move they never thought they’d make. They may no longer see any value in holding on to their traditional services when they can save a few bucks in the interim. Streaming services may see an additional boost from these viewers looking for a replacement for sports.
However, when (if?) we return to normal life, retention is going to be the major challenge for streaming services. Even Netflix admits they are anticipating a decline in viewers and growth post-quarantine. As governments ease lockdown restrictions, people will be so sick of staying in their homes watching content, no matter how binge-worthy. We will want to get out and make up for lost time, visiting family and friends and enjoying all out of home activities.
Furthermore, there is a supply issue that some experts see as a potential downfall. With all production on new projects at a standstill, these streaming services have a finite number of titles they can show. Although, if you run out of things to watch on these platforms, I think you have bigger problems to worry about. Step away from the screen! But all joking aside, many of the streaming services say they have just enough up their sleeve for the near future.
If we wind up being quarantined for a longer period of time, then they may run into some problems keeping us entertained with new content. Some have suggested that animation may be the way to go. After all, animators can work remotely. Yet, it is still difficult to pull off quality animation when everyone from producers to writers to artists are all working from far-flung locations. And for the most part, animation is targeted toward children, so you can only go so far with it. Yes, we’ve had super successful animated comedic shows for adults like South Park and The Simpsons, but I don’t recall many animated dramatic shows for adults. Who knows, maybe that could be a new niche to tap into?
Others have suggested releasing major motion pictures intended for theaters direct to home, as we saw with Trolls World Tour. But we can’t expect this to become the norm. Studios such as Disney and NBCUniversal have already come out saying they will not do this, especially with their blockbusters. They would lose out on millions of dollars going to direct to consumer, so they would rather wait it out until they can have their cinematic release.
I think we were pretty into our Netflix and HULU and whatnot before quarantine and I think we will still be afterwards. And I’m sure the brains and creative forces behind the operations will find ways to keep us entertained. However, it is unlikely that they will be able to maintain current numbers as they stand today. Yet, it will be interesting to see how things play out down the road, as we await the launch of some new streaming services. Netflix has such a strong hold on the market. Will it stay that way or will someone else knock it off it’s pedestal as we return to our normal lives?
Stephanie Bariatti works as a Consultant and Project Manager for SMB Media Consulting. She has had extensive experience with many facets of advertising and media, having worked for and with creative agencies, production companies and research departments. She lives in New York with her wonderful husband, three lovable little boys and a snuggly Golden Retriever.
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