We’re all coping with the current pandemic in our own ways. But in the recent few months, we seem to be following a constant pattern of behavior: wearing masks, sanitizing and washing hands, working remotely and probably watching Netflix. With fewer social activities taking place due to global lockdowns and quarantining, home streaming service expenditure has increased from 20% to 50%. Given this never-seen-before surge in demand, we can say that our beloved internet is going through the most intense stress test in history.
The global need for escapism and entertainment is causing a windfall for streaming services. Netflix has more than doubled its projected number for new subscribers since the start of the pandemic, Disney+ has added 22 million subscribers also. However, the current status quo for the streaming sector is a bit more complex than it seems. Media companies are experiencing new challenges and opportunities and are building technological solutions to help facilitate growth amid the crisis.
Quarantined countries have more streaming time
We can see the effects of COVID-19 on streaming services by watching how currently quarantined countries (those hits hardest by the virus) have been behaving. Even without a full-blown quarantine, the rise of voluntary social distancing and enforced isolation creates a distinctly different situation.
The spread of the virus has prompted studio and streaming services to rethink how to distribute and create content. Certain pressing issues such as skipping the box office, closing down production, and jumping release dates are at play. These factors will all lead to a greater strain on streaming services and increase the pressure on the internet. The pandemic has also caused theaters to close down across the US and all over the world, which has been associated with a 13% increase in the streaming sector. with the potential to increase to 60%.
Better-than-expected subscription earnings
It might seem like a straightforward and logical equation: more time at home means more streaming which means more profits. But it’s a bit more complicated than that. Several streaming services such as Netflix are not modeled to reap profits from an increase in the users’ streaming time, they make their profits mainly through subscriptions; which is the main reason why some predicted that Netflix may not see a huge boost in profits.
However, Netflix witnessed a surprising increase in their subscriptions. The company has actually doubled their estimate from an initial 7 million new subscribers to 15.77 million new subscribers.