The COVID-19 has severely impacted multiple sectors across the media and entertainment industry, worldwide. With shoots on hold, theatre releases postponed, and movie halls shut, the industry’s upcoming developments are laced with uncertainty. Even when theatres open again, mitigated livelihoods and social distancing norms are expected to discourage the masses from jostling to watch movies. As a result, in the months to come, the media and entertainment value chain will struggle with overcoming the disruption caused by the pandemic.
Rapid changes in consumer behavior and preferences amid the pandemic, cancellation of live events, concerts, and sports, cease in content creation and productions, as well as slashes in advertising expenditure, are further impacting media and entertainment agencies. But on the brighter side, the gaming industry and over-the-top (OTT) platforms are anticipated to thrive, in terms of consumption and revenue.
The Thriving OTT Industry
With most of the population staying at home due to the lockdowns imposed by governments, over-the-top (OTT) video and audio platforms observe a growing trend. OTT entails streaming media services provided directly to viewers through the internet. They bypass broadcast, cable, as well as satellite television platforms that conventionally control and distribute such content. Few examples of OTT media services include streaming platforms such as Netflix, Hulu, Amazon Prime Video, Disney+ Hotstar, and Spotify, among several others.
Over the last few months, OTT media services have experienced a surge in traffic, owing to the limited entertainment options during the pandemic. For instance, Netflix reached 15.8 million subscribers in 2020, particularly from January to March. The California-based enterprise had anticipated around 7.2 million subscribers, but instead, observed an increase of over 50%, in terms of paid subscribers. Its largest expansion was witnessed in Europe, with an addition of more than 4 million new subscribers. Similarly, Amazon Prime Video, the internet-based video on demand platform, also recorded a 67% surge in subscriptions.
On the other hand, several leading platforms are also offering subscription-free services, anticipating to generate more subscribers post-COVID normalcy. Numerous users who have previously not explored OTT services are opening themselves up to the prospect, and experiencing them. They are also being familiarized with options, such as having a plethora of movies, music, TV shows, and documentaries to choose from, as well as the ‘pause and play’ facility that dish television or cable operators do not provide. In all, COVID-19 has shifted OTT from being a niche platform, into the mainstream.
Gaming Market: A Growing Trend
The gaming sector is witnessing considerable growth as individuals pursue new ways to occupy themselves. According to a recent digital media trends survey, more than 33% of consumers have utilized a cloud gaming service, watched virtual sporting events or e-sports, and subscribed to a gaming platform, for the first time.
Likewise, leading video platforms that support live-streaming and gaming content, and Real Money Gaming (RMG) are also gaining added traction. Affordable smartphones, localization of games, and lower data rates have further contributed to the number of gamers, especially in emerging economies.
From being just a recreational activity, gaming has evidently shifted base, with gamers and investors ultimately identifying the arena’s lucrative side. For instance, June 2020 recorded one of the largest gaming deals of the year, with the United States-based gaming enterprise Zynga acquiring two titles from the Istanbul-based Peak Game’s portfolio for nearly $1.8 billion. Garnering almost 12 million Daily Active Users (DAUs), they were among the highest-grossing across the Apple App Store.
A light in the Future
The COVID-19 crisis has fast-tracked engagement and consumer acquisition for online content, OTT platforms, and video gaming services and experiences. This trend is likely to continue beyond the pandemic as users look for games that help them unwind and relax from everyday stresses, while life moves on to the ‘new normal.’
Nevertheless, the media and entertainment industry is anticipated to face various challenges as the masses return to workplaces, colleges, and schools. Despite the surge in viewers and subscriptions, OTT platforms are projected to witness a decline in memberships after the COVID-19 pandemic is effectively contained, and people are permitted to move around freely. Moreover, an increased risk of content piracy is also expected to pose a significant threat to the market. As people adjust to everyday life with nation-wide lockdowns being lifted, the willingness to continue spending more on subscriptions is likely to reduce.
Thus, innovative incentives, meaningful interactions, and communications are the key to ensuring the engagement of new users, in the post-Coronavirus world.