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Online media streaming will benefit from the coronavirus pandemic

... if it does not last too long!

Historically high results in February for most streaming services

The coronavirus is spreading across the globe, threatening public health and the economy. The media streaming industry is so far benefiting from the crisis. Companies such as Netflix, Amazon and Disney+ have seen a substantial video and audio consumption increase, which will further rise in the coming weeks as many individuals across the globe are confined to their homes, with little else to do than  binge-watch series. This trend is reinforced by the closure of numerous cinemas, theatres, shopping malls, etc., as well as travel restrictions and sports events cancellations.

Some concrete example:

  • In Italy and Spain, first-time installs of Netflix’s app were up 57 percent1 and 34 percent1, respectively, in the last four weeks.
  • Live streaming on players such as Twitch, YouTube and Facebook rose by more than 60 percent2 in Italy during the last six weeks. In addition, consumers were looking for diversified content as the number of channels they watched increased by more than 90 percent2.
  • Content consumption on Viaplay (leading streaming service in the Nordics)3 grew by more than 40 percent4 during the second week of March compared to the same period in 2019. TVOD content rental and acquisition grew by 64 percent4 during the second weekend in March compared to the previous weekend, with the highest increases seen in children’s movies.
  • Netflix Party, a Google Chrome browser extension which lets users sync and watch movies on the platform together, recorded a surge of installations since February 2020, doubling the total amount of downloads recorded since 2017.

What about the coming weeks?

Under those lockdown conditions, which are taking hold in several European countries, it is safe to say that linear and non-linear consumption will continue to increase. The total streaming consumption could climb by 60 percent5, accompanied by a potential spectacular increase in streaming subscriptions and TV-connected devices acquisitions. Up to 75 percent5 of individuals are expected to subscribe to an additional streaming service during this "stuck-at-home" period. Traditional media will also gain popularity in the coming week, with a usage increase of 20 percent5.

Content-wise, news, talk shows and live content will continue to increase. As (sports) events are cancelled, demand for archive content will rise. As schools progressively close, demand for children’s shows will explode.

Traditional broadcasters will not be left behind, with a potential significant increase in news consumption through digital streaming media (including over-the-top services) as well as linear media, given that individuals are looking for reliable news sources. Some broadcasters are pushing boundaries further and seizing the opportunity to launch a "coronavirus channel" on their streaming services to extend the news coverage (e.g. ABC News).

It is not all rosy 

This could quickly change if the coronavirus restrictions remain in place. Production schedules are already starting to be affected, with both talent and facilities becoming unavailable which could lead to a drastic decrease in commissioned and produced content. Disney, Netflix and other production houses have already shut down all production, with major series put on hold like the expected Stranger Things season 4.

Following the cancellation or postponement of major sports events like the UEFA Euro 2020, sports streaming services risk losing significant revenue. With regard to ongoing sports competitions, such as the Belgian Pro League, content distributors could potentially be compelled to pay for the full rights package, even though the competition could end prematurely, which would turn into an economic disaster for those distributors6.

Furthermore, Netflix and other streaming platforms have been urged in Europe to switch to standard definition (SD) during peak hours as internet infrastructures are being saturated. Vodafone reported that internet traffic grew by more than 50 percent in the last three weeks in some European countries7.

In that vein, Netflix announced that they would reduce by 25 percent their bandwidth consumption in Europe without affecting the streaming quality given their expertise in data compression. This is good news for the end user! A bit less for Netflix who could pay a steep bill given the computing power needed to execute compression operations. Internet service providers, on their side, could limit internet speed to preserve infrastructures, resulting in a degraded experience for the end user (e.g. poorer image quality).

To conclude, it appears that most online media providers are, and will, benefit in the short-run from the coronavirus pandemic but the longer the crisis lasts the more mid-term content production and revenues will be at risk.

In our next post, “Broadcasters are connecting us all”, we will outline how streaming companies and traditional broadcasters should deal with the crisis in the short but also the mid-term.

1 SensorTower Data, 18th March 2020
2 StreamElements
3 Excluding sports coverage
4 Televison Business International, Viaplay reports viewing jump of 44% following Coronavirus outbrea, 17th March 2020
5 Nielsen, Staying put: consumers forced indoors during crisis spend more time on media, 16th March 2020
6 L’Echo, Vent de football panique dans le monde du sport, 12 March 2020
7 The Guardian, Vodafone reports 50% rise in internet use as more people work from home, 18 March 202

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