“Virus-driven lifestyle changes will drive temporary home entertainment paradigm”

The continued escalation of Coronavirus worldwide will continue to have a major impact on the global entertainment sector; major movie theatrical releases are being postponed, theme parks are closing, music concerts/theatre shows postponed and TV show production, particularly those with live audiences scaled back or cancelled/delayed. In addition, numerous major sports leagues and events have been suspended, providing broadcasters with major headaches.

In its latest Digital Media and Entertainment report, Futuresource Consulting said that as a result, consumers will have limited options or desire to attend out of home entertainment experiences. Couple this with an increasing emphasis to stay at home and travel bans, the market research company has asked if this provides a highly unusual opportunity for the home entertainment industry?

“Whilst the word ‘opportunity’ is used lightly, particularly as home entertainment companies are being impacted in numerous ways,” the report said, “pre-recorded home entertainment is likely to see a surge in viewing, particularly across digital platforms.”

With consumers staying home and watching more television content, will they be investing more in their current sets and their TV content platforms? The Futuresource report explained…

With consumers having more time at home and viewing options reduced, subscription video on demand (SVoD), catch-up TV services and transactional digital video services are well positioned to benefit in both an increase in engagement and potential new user uptake.

Premium digital video viewing behaviour is well established. Around two-thirds of US households now have at least one SVoD service, with this figure around half in the UK. “Service stacking” (taking more than one service) is now commonplace, with UK households using mostly two services at home currently.

Futuresource’s Living With Digital survey suggests that strong momentum in SVoD subscription uptake in 2019 is set to continue into 2020. Whilst service churn will be evident, most SVoD subscribers say they won’t cancel their service in 2020 and over one-third of SVoD subscribers say they will take at least one more service in 2020. This positive momentum could be unexpectedly assisted by a (hopefully) temporary change in consumer lifestyle during the virus outbreak.

The “hot” service in the home entertainment industry continues to be Disney+. It is set to launch across key European markets on 24 March. The outbreak may well provide a further boost to its initial subscriber numbers. Free trials for Netflix, Disney+ and other services amongst current non-subscribers could see a rise, particularly as consumers worry about their personal finances.

Separately, Netflix has already become the de-facto SVoD service for many consumers in leading markets and could see its loyalty strengthened with existing customers.

Transactional digital video services could also benefit. With titles typically launched around three months after cinema, in the short term, digital sales and rentals of major movie releases in this window could receive a boost. Positioning on device/TV home screens and digital retailers would become increasingly paramount for these titles, especially against the backdrop of SVoD and other on demand options.

However, the postponement of key theatrical releases will have adverse impact on this sector in 2020, high profile new instalments from the Bond and Fast & Furious franchises are unlikely to witness a home entertainment release in 2020.

Could we see the home entertainment industry also provide more unorthodox short-term alternatives to consumers to watch brand new, early release or otherwise delayed movies at home? For context, the crisis in China saw box office down almost $2 billion in the first two months of 2020.

Some consumers may also feel compelled to revisit their DVD/Blu-ray catalogue, whilst this isn’t necessarily a direct revenue driver, it may well help re-ignite a passion amongst lapsed users, once the virus has past.

Whilst the above is largely speculative, the crisis and uncertainty surrounding it will require entertainment companies to quickly evaluate alternative programming and release options, the likes of which we may never have seen before.