Video Streaming Services May Be One Market Segment that Benefits from the COVID-19 Pandemic

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Few businesses will openly champion how they benefited from the shelter-in-place orders across America, but video streaming may just be one entertainment industry segment that will quietly relish being in the right place at the right time. Early returns showed that paid subscriptions for streaming TV and video jumped 32% during the second week in March, according to Recurly Inc. Binge watching is up more than twenty-five percent as nearly one-third of the world’s population is huddled together at home. “Broadband providers are thus far experiencing a traffic surge between 30% and 50% across their mobile and fixed networks,” says Alfonso Marone, head of media strategic advisory at KPMG U.K.

To bolster the share of new recruits to internet video streaming, many providers are extending the usual 7-day free trial period to 30 days as they hope to retain new viewers after they are released from home confinement. During the stay at home order, a recent survey indicates that the average American is streaming eight hours of video each day across an average of four streaming services. “The findings of the survey illuminate just how much people are turning to streaming as a way to stay entertained and cope with social isolation,” said a spokesperson for Tubi. “Americans are bingeing more content than ever before, seeking free streaming options alongside subscription services and turning to password sharing as a way to find more content. As more people are staying home to practice social distancing, streaming and entertainment has never been more important. Whether you’re looking for new TV shows and movies to round out your streaming library, or you want to save a bit of money, checking out free, ad-supported streaming services is a great option.”

The closing of movie theaters nationwide has caused regular theater goers to use pay-for-view streaming in the absence of a night out at the local brick and mortar multiplex. Most studios shortened the 90-day theater, premier period of movies in theaters at the time of the closings. Viewers can access this year’s newest releases at home for $19.99 on many streaming services. Universal Studios released its latest movie “Trolls World Tour” to home viewing without the traditional theater premier. More titles are scheduled to follow before theaters are permitted to reopen. Warner Brothers and Disney are expected to follow Universal’s lead and produce more mid-tier movies for direct release to home viewing in order to satisfy a growing sequestered audience.

One dark cloud among all the silver-screen linings is the difficulty the move to WIFI usage is having on bandwidth. Increased use of streaming services and the number of employees working at home during the pandemic is leading to some concern about the impact the demand is having on the internet’s capacity. Netflix, YouTube, and Amazon are scaling back data use in Europe by reducing the quality of their streams, and major internet providers like Comcast, Spectrum and Verizon have been taking steps to expand online access, including boosting speeds, waiving fees, and setting up hotspots.

“Increased consumption of digital content from mobile apps to free TV streaming and gaming has already been observed in China and Italy,” says Maria Rua Aguete of Omdia, “Online streaming services provided by brands such as Netflix and now Disney+ are likely to see 12% growth. Ecommerce will be the other sector that will see a revenue boost as a result of the pandemic, adding $175 billion in revenue in 2020, which represents a 5% increase.”

Ultimately the popularity of streaming services will likely diminish when nations around the world return to a more normal social environment, but for now the industry segment is experiencing a windfall due to the pandemic’s sequester and stay at home orders.