The decline of traditional pay television has been a significant but not wholly unexpected development. The industry has moved toward online delivery for years as internet technologies have advanced and proliferated throughout the world. With even more powerfully backed streamers set to hit the market in the coming weeks, digital entertainment will only grow stronger. The rate of cord-cutting is accelerating, and consumers are switching even faster to streaming sites amid the coronavirus pandemic.
“Streaming has been a significant disruptor in the video market, with the likes of Netflix and Amazon Prime enticing consumers to invest in their services at the detriment of physical DVD and Blu-ray sales,” Zoe Mills, Analyst at GlobalData, a leading data and analytics company, said. “The COVID-19 pandemic is set to exasperate this market even further as not only is there a major new entrant to streaming but also with more people spending time at home, investment in these subscription services appears more worthwhile as consumers are able to use them more regularly.”
Netflix in particular is thriving during the global lockdown as the rest of Hollywood suffers through a debilitating shutdown. In the company’s first quarter earnings report last week, it was revealed that Netflix had added more than 15 million new subscribers, nearly double their internal expectations. Netflix stock even hit an all-time high as the streamer saw record traffic and a surge of new sign-ups. With a unmatched pipeline of new content to deliver directly to consumers, Netflix has separated itself from Hollywood both among traditional media empires and streaming rivals.
Hot on its heels is Disney+. As the Walt Disney Company desperately watches its share price drop every day this pandemic continues, the fledgling streamer has been the lone bright spot. Equipped with a war chest of blockbuster franchise properties, Disney+ raced past 50 million paid subscribers worldwide just five months after launch. Though the marketplace was entirely different and far from directly comparable, it took Netflix seven years to accomplish the same feat. Now, Disney+ has been launched in several European countries also implementing self-isolation and plans to be available across the globe by 2021.
“It is clear streaming services are becoming integral to consumers’ lives and the numerous lockdowns across the world are encouraging people to spend more time in front of the TV or on a laptop,” Mills said.
It’s fair to question what percentage of new subscribers for both services will retain membership once the lockdown ends. Churn is a very real issue for streaming exacerbated by inflated short-term gains amid quarantine. But both platforms have seemingly separated themselves from the competition and will have ample opportunity to keep customers on the hook. It’s strange to say, but the coronavirus has given Netflix and Disney+ an unexpected lifeline.