We are all in this pandemic together; however, everyone is coping with Covid-19 in their own ways.
Lockdown, work from home, and social distancing restricted people's entertainment, and the only source of fun that remains are the streaming platforms.
The online video streaming business boosted enormously in the lockdown and beat their biggest competition, the television networks, for a couple of reasons.
The television networks are highly dependent on live events, be it awards shows, concerts, or sports. Since live telecasting is out of the question in this coronavirus pandemic, the users seek a different form of entertainment, and that alternative is OTT platforms.
Secondly, television shows production faced a significant challenge around 60% of global drama production delayed in 2020, making them move their content on a streaming platform like Netflix and Amazon Prime that pushes the regular television consumers to cut their pay-tv explore streaming services to watch their favorite shows in lockdown.
The great demand for streaming platforms is undoubtedly the effect of the coronavirus pandemic, and so far it seems that the streaming industry is going to make a profit in the year 2021 as the cinema industry is relying on OTT platforms.
Cinema is undoubtedly the most affected industry during a pandemic. However, OTT platforms came to the rescue and safe film producers and distributors to generate profits by releasing films directly on streaming platforms.
The simultaneous release of the film on theater and streaming platforms is most likely to become a norm in the future. The leading film distribution company, Warner Bros, has already adapted this norm by releasing Wonder Woman 1984 in US theaters as well as on HBO Max simultaneously. Moreover, all Warner Bros. 2021 movies release simultaneously in theaters as well as on HBO Max.
Since DC Comics is a subsidiary of Warner Bros. so every major DC movie will release on HBO Max in 2021 including Suicide Squad 2, Black Adam, and Justice League Snyder Cut.
Marvel is also considering starting MCU: Phase 4 in 2021 with Black Widow as a Disney Plus release instead of a theatrical release.
These OTT releases will also create a huge demand for VPN services because DC and Marvel have a huge fan following globally although HBO Max is also available in the USA and Disney Plus is available in few countries.
If the leading film distributors are planning for simultaneous releases then other studios might as well follow suit. This year the streaming industry will surely gain the maximum profits off Covid-19.
Consumption has been digitized, and it has significantly transformed the entertainment industry. Digital TV Research has predicted a 200% growth in online movies and TV episodes revenue from $83 billion to $167 billion between 2019 and 2025.
Coronavirus pandemic is undoubtedly the primary factor for the massive growth of streaming service; however, some other factors are equally crucial for the growth that will help OTT (over-the-top) platforms keep their profits intact.
The primary reason is convenience. Major streaming services like Netflix, Amazon Prime, and Disney + offer subscription-based video on demand that provides significant comfort to the consumer to cancel anytime they want and watch anytime. The viewer is not bound by any restrictions. They can watch from anywhere and anytime. This sort of convenience is contagious, and younger generations are getting used to this kind of convenience.
The secondary reason is the availability of options and the freedom to choose. Set Godin's we are all weird describes that humans are inclined toward any product or service that allows them to choose. Consumers love to be in authority to get a choice to accept or reject anything. In this case, the streaming platform offers the freedom that is not available in any other sort of entertainment.
Considering the two major factors and the predictions, the people are getting used to this freedom and comfort that makes them helpless to pursue the OTT platform for entertainment purposes.
The streaming industry will indeed witness some new OTT platforms making the competition more brutal that might create a slight problem for the industry. Many streaming pondering over the after-affect of Covid-19 on the streaming industry and fears that the rising competition might turn the table for the SVOD industry. However, this is not the first time that rising competition is considered a threat to the streaming industry.
For years, Netflix enjoyed the monopoly of being the top subscription-based video on demand (SVOD) platform. Other platforms took a while to understand the significance of the streaming industry. Hulu and Amazon prime have managed to gain significant market share, and Disney absolutely nailed the timing of launching its streaming platform right before the coronavirus pandemic in November 2019. Since Disney Plus has major franchises associated with it such as Star Wars, MCU, and Pixar, they easily captured the attention of the younger audience.
The increasing competition in the streaming industry is a clear sign of industry profitability. Initially, it seemed that the market share would fluctuate from the leading streaming platform. Some industry experts also believed that rising competition might affect the SVOD industry, as the viewer's favorite programs are available on different platforms and regions.
Some also predicted that small companies like TIVO will dominate the streaming industry after the SVOD competition gets fierce.
However, nothing of the predicted things happened. Many users subscribed to multiple streaming services, and all major streaming platforms witnessed significant growth in their subscription base. Moreover, the viewer also found the hack to break geographical restrictions by using a VPN. Many streamers unblock American Netflix regularly by using any notable VPN service.
As we have discussed earlier, the rising competition has proved unaffected to the leading OTT platforms' market share. Nonetheless, there are chances of the streaming industry turning into the Red Ocean.
When Netflix's popularity grew in the early 2010s, the Television networks and studios joined hands with Netflix to generate additional revenue on the SVOD platform.
However, it backbites the television networks as viewers preferred to watch the same content on Netflix than cable TV. Studios started witnessing the potential of SVOD and made their own OTT platforms.
Last year, NBC studios launched their OTT media service Peacock TV that caused Netflix to lose its most-watched TV show, The Office, and it is an alarming situation for leading streaming platforms.
As there is a saying, 'too many cooks spoil the broth,' that might be the case for the streaming industry if every other studio comes up with their own OTT platform and takes down their cash cow seasons from other streaming platforms.
Netflix and other OTT platforms are trying to cope with this issue by creating their original shows and moving away from distributing licensed content.
These new OTT platforms have not affected the market share of any leading SVOD platform, but it might have some consequences in the future for the streaming industry.
The preference for streaming platforms does not seem to slow down any time soon. The streaming will continue to gain profits off Covid-19, and even after the pandemic, as we know, streaming addiction is real.
The real comfort viewers get from the OTT platform is the freedom from time restrictions that cannot happen on television.