On COVID-19’s Impact on Media Consumption
COVID-19 hits the U.S., prompting widespread disruptions and accelerating changes in consumer behaviors
Ever wondered what would happen if everyone suddenly became agoraphobic and stayed at home all the time? Well, now that various lockdowns and “social distancing” policies are taking effect across states as COVID-19 escalates in severity, we are seeing early signs of how things will shake out, especially in regards to media consumption and media-related consumer behaviors.
Online, Now More Than Ever
With nearly all offline social events canceled or indefinitely postponed, and government policies in place that strongly advise people to stay home, millions across America are now holed up at home and have no choice but to gravitate towards TV and online channels for information, entertainment, and socialization.
According to a proprietary survey UM conducted in response to the coronavirus outbreak, 37% of U.S. consumers say they will likely consume more TV whereas 39% say they plan to watch more streaming content. Another 21% report that they will likely spend more time streaming music and listening to podcasts. Whatever the channel, it is self-explanatory that media consumption at home will see a huge increase in times of social distancing. According to a new MAGNA report, last week in the U.S., connected TV streaming was up 25% compared to the week before.
In contrast, radio and OOH media are taking a hit. A national survey conducted by Colling Media found that 16.6% of U.S. consumers are listening to less radio (at home or in the car) than they were the week before, and 35.4% are seeing less OOH advertising. Interestingly, just because people are staying at home does not mean we are putting our phones down: the survey found 53.3% of consumers are consuming websites on their mobile devices more than they were last week.
Given the necessity of online communication channels during this period of social distancing and working from home, there is no doubt that fast, reliable internet connections will be of the essence to many. Funnily enough, telecom companies are one of the few stock groups that haven’t been hurt by the pandemic-triggered economic downturn. Some ISPs are lifting data caps and lowering bills in response to COVID-19, while some, such as Comcast and Charter, are offering basic internet services for free for 60 days to help low-income households stay connected. That being said, in the long run, one possible side effect of COVID-19 for the telecom companies is the delay of 5G rollout due to halted base station installment and supply chain disruptions.
More importantly, another long-term effect of COVID-19 is on the bottom line of telecom companies, many of which also serve as Pay TV providers in the U.S. Sports have long been hailed the last bastion for pay TV against cord-cutting, but now with nearly all major sporting events suspended or canceled, there is a real vacuum in live TV programming that warrants the kind of appointment viewings which can justify keeping an expensive pay TV package, especially in comparison to the overwhelming amount of content available on streaming.
Sure, one could argue that people will watch live TV for news updates to stay informed about the pandemic. But in a time when 55% of U.S. adults use social media as their primary source of news, according to the latest data from Pew Research Center, it is safe to say that news content alone won’t be enough to keep people from cutting the cord and switching to streaming services, especially considering that some are saying that we may be looking at an economic downturn “akin to the Great Depression.”
Streaming’s Moment to Shine
Thanks to the pandemic, all offline entertainment options have all but vanished. Over the past two weeks or so, Broadway dimmed its lights; movie theaters across the world temporarily shut doors with nearly all upcoming wide releases delayed; Numerous concerts and music festivals, including Coachella, were canceled or postponed.
Therefore, it comes as no surprise that many have turned to streaming services to kill time. Time spent on viewing streaming content surged 20% worldwide last weekend as many were forced to hunker down at home. Analysts found that Netflix subscribers spiked in areas suffering COVID-19 outbreaks, and the latest Nielsen report predicts that streaming usage will rise by 60% as a result of the pandemic. Seizing the moment, some streaming services, such as Shudder and Sling TV, are offering discounts and extended free trials to keep those under quarantine entertained.
As more people discover the benefits of time-shifted, often ad-free viewing via streaming, it seems safe to say that this pandemic and the resulting economic downfall will accelerate the cord-cutting movement. Some will of course come back (though probably via cheaper vMVPDs on a monthly basis), but many will never return. And TV ad revenue, as a result, will take a hard hit.
Crises often push innovations forward, and this is no doubt a moment for streaming services to cement their position as a primary distribution channel in not just home entertainment, but in all of entertainment. Already, we are seeing some interesting examples of entertainment companies embracing streaming as a way to stay connected to their audiences. Last week, Seattle Symphony streamed a series of live concerts to viewers for free via Facebook and Youtube. The Metropolitan Opera is also planning to do the same via its official website. Earlier this week, popular digital film collection platform Movies Anywhere announced that it will begin letting users lend their digital movies to friends in an effort to attract new users. Some small. Even theater plays are embracing streaming, although union rules prohibiting live-streams in theater may prevent moving performance recordings to streaming quickly.
Perhaps more significantly, the closings of movie theaters has pushed some Hollywood studios to reconsider the theatrical window and adjust their release strategies in response to this unprecedented crisis.
Universal Pictures, for example, is making digital rentals of some of its just-released titles, including The Invisible Man and The Hunt, available for on-demand rental purchase on iTunes and Amazon. Normally, films become available to rent 4–5 months after their theatrical release date. Moreover, the Comcast-owned company also plans to release DreamWorks Animation’s Trolls World Tour for on-demand viewing the same day it is released in theaters.
Similarly, Disney is taking action by moving up the on-demand release date of The Rise of Skywalker while dropping Frozen 2 on Disney+, three months earlier than expected and just 19 days after it left theaters, to drive more families to its streaming service.
Of course, not all movies delayed by the pandemic will just appear on streaming services — after all, there are still big bucks to be made in a proper theatrical run. But as social distancing practices drag on — some say until summer, some say maybe for a year — more studios will likely be reconsidering their release strategies to fill the void that sports left.
On the flip side, this pandemic is also causing nearly all movie and TV productions to shut down, which means that there could be a content shortage about nine months to a year down the line, leaving a gap in original programming that companies could fill with reality series with quick production turnaround.
Looking ahead, with two new streaming services, Quibi and Peacock, set to launch next month, it will be fascinating to see whether their launches are boosted or dampened by the unforeseen circumstances that we are now in. Quibi is offering a 90-day free trial to lure sign-ups, but its /mobile-only stance could hurt its chances when most people are stuck at home and have access to bigger screens, while Peacock’s launch may depend on how many non-Comcast users can access the ad-supported free tier before it officially rolls out.
In addition, there is also white space in developing co-viewing features to replicate a shared viewing experience online. Sure, browser plugins like Netflix Party exist, but there’s a real need, now more than ever, for streaming services to develop an integrated, native solution to bring people together in shared experiences. Alternatively, gaming may be able to fill the void for social interaction better than streaming services can.
Keep Calm and Game On
Besides streaming, gaming and esports represent another media segment that stands to benefit from the sports blackout and large-scale social distancing. With millions ordered to stay at home and all social events canceled, it is only natural that many have turned to video games for entertainment and, quite often, socialization too. Already, live streaming across YouTube, Twitch, and Mixer grew by more than 66% in Italy between the first week of February and this past week, according to StreamElements data, and viewers were watching nearly double the number of channels.
To be fair, the pandemic has hurt the gaming industry too. Many esports events had to be canceled or rescheduled due to bans on large gatherings. Ironically, even though esports are based on online games, most tournaments happen with all players in the same venue, using devices hardwired into the same connection, in order to avoid potential advantages caused by the slightest network latency. Therefore, even esports events could be easily conducted online. That being said, some esports leagues are reportedly looking into running some matches online. Shortly after the NBA suspended the 2019–20 season due to the coronavirus pandemic, for example, the Phoenix Suns announced that it will continue to play the rest of the matches on NBA 2K20 and live-stream them on Twitch.
Still, in a world increasingly confined to digital environments, it is safe to assume that more people will discover and watch matches, even if revenues generated from esports events become temporarily unavailable. Steam, a popular game streaming service, has seen a massive surge of online gaming activity amid the COVID-19 pandemic, hitting an all-time record of over 20 million players online over a 24-hour period.
Esports is also more related to regular sports than many would assume. For example, NBA 2K20’s “NBA Today” option for its MyLeague mode, which lets players begin a Franchise mode play-through from the current day in real life, is being crashed since the real-life NBA games have been canceled for the season.
Interestingly, not all mobile games are meant to be played at home. Niantic, for example, has updated its popular “Pokémon GO” in response to the pandemic. By implementing multiple changes to make the game more entertaining at home, it aims to reduce driving players outside at the risk of spreading the virus.
Perhaps more importantly, in the times of social distancing, online games are shaping up as an increasingly crucial social channel for players. After all, if we are not supposed to see our friends and party together, then why not play a game together and hang out in a virtual world. As we noted in our piece on VR and metaverses from last year, it won’t be long before more advanced social features are integrated into MMO (massively multiplayer online) games like Fortnite to encourage more users to use the game as a platform to socialize with fellow players both in and out of gameplay.
The effects of shutdowns and social distancing can be somewhat paradoxical — if they work effectively as intended, they will seem like unnecessary over-reactions in retrospect. Still, it is better to be safe than sorry. Smart brands plan ahead and go where the audience attention is shifting. Ultimately, the longer this episode of pandemic fallout and social distancing lasts, the more media consumption and audience behavior will change and become solidified. If your brand has yet to look into streaming, CTV, and gaming as potential media channels to reach your audiences, let this pandemic be a wake-up call for your media strategy.