Advanced Television

Media analysts discuss Covid-19 impacts

April 24, 2020

The team at Ampere Analysis is publishing a regular podcast discussing the impact of the Coronavirus pandemic on the entertainment industry and has shared a top line summary of what it means for the entertainment industry now, and for a post-lockdown future:

TV providers increase free offerings: Alexios Dimitropoulos, Senior Analyst

  • Pay-TV operators have increased free content. The most common offer is premium channels for subscribers at no extra cost. The kids’ genre is most widely available for free during lockdown.
  • Live sport is one of the most important content offerings to TV operators, and now that there is no live sport, there has been an increase in free offerings.
  • In the UK, Sky Sports has paused subscription fees, and in Portugal, all premium sports packages have been suspended.
  • Sports subscribers are being presented with new shows and historic games as operators look for content to fill the programming gaps.
  • With sporting events completely cancelled, it is expected that TV rights will be revoked, and in most cases, there will be a reimbursement between the TV rights holders and the leagues. We expect these to be made retrospectively, and as new deals are signed for future tournaments.
  • Mobile operators are also offering incentives and promotions such as free data, calls and SMS, as well as waving roaming and other fees.
  • Free data has been the most common offer, with 44 of 56 operators choosing this option for their customers.

The lockdown has driven up Netflix subscriptions: Tony Maroulis, Principal Analyst

  • From a subscription perspective, Netflix had the best quarter in its history in Q1 2020, with net additions of over 50 million paid subscriptions. Evidence suggests that this is strongly linked to international lockdown measures. However, the streaming service’s revenue is less strong. This is for two reasons:
    • Firstly, a significant portion of Netflix’s new subscribers joined towards the end of the quarter, meaning that new subscribers have only paid for one or two months.
    • Secondly, the US dollar is generally gaining value, meaning the value of an internationally paid subscription for Netflix is declining. For example, in Brazil, the price of the package has remained stable, but the platform is earning 25 per cent less per subscription due to currency devaluation.
  • The vast majority of new paid subscriptions have originated from international markets. Around 7 million are from the EMEA region; 3.6 million are from the Asia Pacific region – which is actually twice as high as Netflix’s previous best for the region; and approximately 3 million are from Latin America.
  • The US and Canada experienced just a small spike in net additions, but Netflix penetration is already very high in these markets and lockdown measures were introduced later.
  • In summary, these results have exceeded Netflix’s own forecast, however, they are expecting a slowdown of subscription growth at the later stage of the year.

The Quibi launch: Henry Beckwith, Analyst

  • New short-form content streaming service Quibi has launched with a mixture of scripted and non-scripted content.
  • Videos are no longer than 10 minutes. Content can be broken down into three main categories.
    • Firstly, their ‘series’ have a narrative running through each episode, which give the feeling of a movie split into chapters.
    • Secondly, ‘shows’ are episodic titles, including game shows and cooking contests.
    • Thirdly are ‘daily essentials’ which tend to be shorter than the other programmes, averaging 5-6 minutes. These have a news and entertainment feel, providing viewers with everything they need to know and analysis of why it matters.
  • Quibi is planning to release all of these titles at least every weekday, and in some cases daily.
  • Once all of these titles are available, they do of course stay published on the platform, allowing people to binge shows which have already been released.
  • A big slice of Quibi’s content is genre-bending, quirky show formats. For instance, a cooking show where blindfolded chefs are blasted in the face with food before being challenged to recreate that dish.
  • By analysing Ampere’s commissioning data, we’ve tracked over 120 titles currently in production, with around 20 more titles in the early stages of development.
  • The high frequency of the release schedule is undoubtedly going to face some previously unforeseen challenges due to the pandemic. This will especially affect any content requiring in-studio collaboration, as well as the daily and essential titles that require a fast turnaround.
  • It’s worth noting that the unique production approach used by Quibi’s content currently limits the number of third-party acquisitions for them to fall back on.

“As the pandemic continues, the impact on the entertainment industry evolves and deepens,” notes Minal Modha, Consumer Research Lead at Ampere Analysis. “Our team is working hard crunching data to update our forecasts and we’ll share these in future podcasts as we have them. These figures are subject to change and we will update them as the situation develops. Having access to the latest trends, forecasts and expert opinion is key for all the players in the industry as we make sense of what is happening now in this rapidly-changing situation and discuss what we can expect in the future.”

Categories: App, Articles, Broadcast, Catch Up, Consumer Behaviour, Content, FTA, Markets, MNO, Mobile, OTT, OTT, Pay TV, Premium, Production, Research, VOD