Whether it is TV shows, movies, sports, documentaries, cartoons, or reality shows, most of us consume some form of video in a day. Amidst the ongoing COVID-19 pandemic, and the mandatory social isolation that’s followed, it has become more clear than ever what an incredible impact the video services industry has on everyday lives. So how can video service providers react to the COVID-19 outbreak, safeguarding their business while maintaining a people-first approach?
Video service promotions ease users’ time at home
It comes as no surprise that media consumption rises during periods of isolation. Users want to stay informed but many also turn to OTT services to pass time, seek comfort, and connect with family and peers. One would be forgiven to think that an increase in viewership is naturally good for the video services industry. However, times of chaos and unease can have significant and long-lasting effects on the entire streaming ecosystem. For example, AVOD models might experience a decline in advertising revenue from badly affected sectors (such as travel and hospitality). SVOD providers may be faced with increased competition as users have more time to explore and compare new services.
In order to stay competitive, yet socially responsible, we suggest taking a user-centric approach. Video service providers can leverage various forms of promotions to attract and retain customers’ attention while also providing content that is both educational and entertaining. Italy was the first European country to see a government ordered lockdown, and also the first nation where media companies actively tried to ease the lives of customers stuck at home. For example, Rai Italia has added more content for kids and teenagers during office hours, in an effort to keep children entertained and educated while their parents work from home.
In Spain, leading telecommunications player, Telefónica, has been giving away free-of-charge channel packages to all consumers — regardless of their carrier. The Metropolitan Opera of New York has taken measures to provide some relief for “opera lovers in these extraordinarily difficult times” by making their streaming collection ”Live in HD” available online. We expect to see more of these complimentary offerings from the media and entertainment industry going forward. The onus is on service providers to find the right balance between user-centric promotions and safeguarding the longer-term vitality of their business.
Surges in demand have an effect on service quality
At the same time, the popularity of video streaming comes with repercussions, especially in times of extensive social isolation. Earlier this week, the European Union urged video service providers to stop the showing of high definition content in order to relieve strain on increasingly overloaded networks. Streaming powerhouse, Netflix, quickly followed suit and has decided to cut the quality of its service across Europe for the coming month. Reports show that 60% of total global network traffic comes from video streaming on an average (non-crisis) day. So, it is easy to imagine how an increase in consumption ends up clogging the internet now that more people than usual spend most of their time at home.
There is a range of actions that can be taken by video companies in order to counter this congestion. One option is obviously to do like Netflix and make high quality content completely unavailable for users, especially during peak viewing hours. This should ensure a consistent, slightly lower, level of quality across the board instead of dealing with service interruptions due to extreme spikes in usage. Another alternative is to launch a pop-up question upon sign-in and ask users, plain and simple, whether they’d agree to a temporary quality downgrade. Not only would this help ease the strain on networks, but it also invites users to be part of the solution. Most of us would probably not be willing to accept a lower quality of service under normal circumstances but unprecedented times call for unprecedented measures and the majority of customers will want to feel involved.
Is the cinema industry finally going OTT?
The rapid spread of COVID-19 can potentially create a large problem for Hollywood film studios. In many parts of the world, movie theatres have already been ordered to close and there is no way of knowing when they can reopen. In China, where the lockdown is now in its third month, studios have already started releasing new titles directly to streaming services. Netflix is less affected by the situation than most traditional movie studios. As a global production powerhouse, they are able to continue the release of new, often exclusive and award-winning productions. This places them in a much more flexible position than some of their competitors, who still rely a lot on the box office for new releases.
The video industry has been trying to move in a “streaming-first” direction for quite some time but up until now, it has been moving at a slow pace. It will be interesting to see what effect the ongoing pandemic, and times of extended social isolation, will have on this development going forward. For video service providers, this could mean early access to big blockbuster titles which will likely have a positive impact on viewership. At the same time, the same is true for their competitors and as mentioned above, isolated users have more time exploring and comparing different services.
So how can video businesses promote these early releases in a way that sets them apart from competitors? Once again, offers and promotions could be a good way of doing this, especially for TVOD models where users purchase content on a pay-for-view basis. The key is to keep your eyes on the horizon and construct these offers so that they are likely to benefit your business in the long-run (such as enticing users to become repeat customers). A second, and perhaps more important, method is to keep optimising your service so that users are presented with relevant content in a thought-through and intuitive way. Naturally, this should be a focus for OTT providers in non-crisis situations too, but becomes even more important when competition rises amidst a flurry of new releases.
Sports content providers find ways to compensate customers
Sports as an entertainment form has been particularly badly hit by the COVID-19 pandemic. A wide range of tournaments, competitions, and major leagues have been cancelled or postponed and this – of course – has a huge impact on OTT streaming services. In sports, the release of new content is everything and if it is no longer available, live sports providers have little value to their customers. If there is nothing new to watch, many users will no longer want to pay for their subscriptions.
The most natural response is to allow users to either pause or pay less for their subscriptions until things have started to turn. Scandinavian media giant, NENT, has started offering temporary price reductions for their Viaplay sports offerings and Sky UK allows users to freeze their subscriptions altogether. While this is definitely a good strategy from a user-focused perspective, it also means that these providers will have to accept the financial blow that comes as a result. Another option could be to redirect the content catalogue to focus more on historical material, interviews, sports documentaries, and highlights. While nothing beats the excitement of a live sports event, many fans are also interested in re-watching classic games and re-living the moments that made them special in the first place.
The current situation certainly warrants a people-centric approach, where companies ask themselves what they can do to provide the best possible service for the millions of people stuck at home. At the same time, the COVID-19 outbreak is causing havoc for a range of different industries and to some extent, the OTT sector is no different. While companies certainly need to focus their efforts on stakeholders’ health and well-being, they also need to find a way to safeguard the continuity of their business.
We wish all our readers well in this time of chaos and uncertainty. We hope that you and your near ones stay safe (and watch a lot of good videos) in the months to come.
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