In the peak of the 2020 COVID-19 government-imposed lockdowns, streaming platforms provided some solace for millions of people confined to their homes.
According to data from Roy Morgan, Australians in particular, consumed streaming services at an astonishing rate during this period. More than 17 million Australians were viewers of a subscription television service in an average month, up 2.4 million from 2019.
But can this growth be sustained in 2021 as more people emerge from lockdown? Or do streaming services still dominate when it comes to entertainment?
The COVID-19 effect: a winner of 2020
The pandemic created a major upheaval in the entertainment industry, with most theatres, concert halls and cinemas shut down for at least a year, along with film and television production.
Despite the carnage, 2020 was a pivotal year for streaming.
Worldwide viewing time increased by 44% in the last three months of the year, compared to the same period a year ago, according to Conviva.
Riding on the coattails of the streaming surge, Warner Bros. Pictures, decided to release all of its 2021 films on US streaming platform HBO Max.
When looking into the performance of some of the top streaming platforms, the decision is understandable.
Netflix’s audience grew more than 50% in 2020, outpacing the broader market. In the first two quarters of 2020 alone, Netflix added nearly 25 million global subscribers, citing the pandemic as providing the unexpected flurry. This performance was reflected in the stock’s growth (NASDAQ: NFLX), particularly in late July 2020, when Netflix encountered an all-time-high of $548.73 per share after soaring 64% from its low in March.
And this wasn’t just isolated to Netflix.
Disney, which experienced a substantial blow after its theme parks were closed during lockdown, was cushioned by the popularity of Disney+. In December 2020, Disney announced the platform has 86.8 million subscribers in total, crediting this growth to the streaming service’s release of Pixar’s Soul and the second season of The Mandalorian.
At the start of the pandemic, Disney’s stock price (NYSE: DIS) initially dropped by 40%. However, by November it climbed back to make up the entire 40% loss and returned to pre-pandemic levels, with many attributing this to the success of Disney+.
Meanwhile, Amazon Prime nearly tripled its viewership in 2020 from 2019 to 3.29 million, and Apple’s Apple TV+ surpassed 40 million total signups at the end of 2020, as well as dazzled subscribers as it announced brand exclusives such as a $70 million deal for rights to Greyhound, starring Tom Hanks.
Since Apple’s initial low in March 2020, where it slipped 6.35%, its share price (NASDAQ: AAPL) gained 130% to the end of 2020. In the same time frame, Amazon saw its share price (NASDAQ: AMZN) increase by 76%.
Down under, some of Australia’s most popular home grown streaming platforms have followed the same trajectory, presenting a huge market opportunity for their listed parent companies which include News Corp (ASX: NWS), Telstra Corporation Ltd (ASX: TLS) and Nine Entertainment Co Holdings Ltd (ASX: NEC).
Nine Entertainment Co.’s Stan (which is currently worth between $500 and $700 million, according to some analysts) and Foxtel’s streaming platforms Binge and Kayo also saw a substantial increase in subscribers in 2020.
In August 2020, Nine reported Stan had amassed 2.2 million active subscribers and revenue of $242.1 million, up by more than half from 2019. While Binge, which only launched in May 2020, had almost 200,000 paying customers as of August 2020, with a large portion of these coming from Telstra customers who were given discounts to join the streaming platform.
A less locked-down 2021: the future
So the question lingers, did streaming lose favour once lockdowns eased?
Not really. Despite some dismal numbers in Netflix’s most recent earnings which found that the company’s subscriber numbers fell to 3.98 million, compared to the expected 6.2 million in Q1 2021, and the stock declined 6% year-to-date, the industry as a whole seems to be maintaining momentum.
As Disney announced the reopening of its theme parks in April 2021, its stock price rebounded to new highs, rising more than 125%. Experts believe that expectations of higher revenue and earnings in 2021 and 2022 could provide Disney’s investors with a potential gain of around 10%.
When it comes to Amazon, the third most valuable stock in the US market, analysts believe it could reach a $2 trillion market cap in 2021 once growth expectations materialise. It seems not even a pandemic can slow Amazon down. It has grown from strength to strength over the last year, setting record revenues in the process.
In Australia, there were nearly a million Kayo subscribers and over a half of a million Bing subscriptions by the end of March 2021, in a win for a previously struggling Foxtel. Foxtel’s total paid subscribers have surpassed 3.5 million, a 21% increase compared to the year prior, thanks to the launch of Binge and the growth in Kayo subscribers.
In May 2021, AT&T announced a $43 billion deal to merge its entertainment arm, WarnerMedia with Discovery. This comes as AT&T looks to rival Netflix, Disney and Amazon by doubling down on its investment into the streaming industry after purchasing WarnerMedia for $79 billion in 2018.
In addition to this, ViacomCBS Australia and New Zealand also announced in May, that its Paramount+ subscription video streaming offering would arrive on Australian shores on August 11, 2021.
According to Deloitte, people are still subscribers of many of the platforms they signed up to during the pandemic. In fact, many are currently paying for an average of five subscriptions, up from three in 2019.
Another report by San Francisco-based customer retention company Brightback, discovered nearly 86% of streaming subscribers say they anticipate keeping or increasing their number of subscriptions in 2021 and beyond.
With video streaming expected to constitute 82% of all internet traffic by 2022, as a result of increased accessibility of streaming platforms, experts believe that streaming services are more than just a trend: it’s the future of entertainment as we know it.