The COVID Bounce: How COVID-19 is Reshaping Entertainment Demand

The economic disruption and social dislocation caused by the COVID-19 pandemic is not evenly distributed. Some business face catastrophe, while others thrive. Across the entertainment industries the same is true, ranging from a temporary collapse of the live business through to a surge in gaming activity. As we explain in our free-to-download COVID-19 Impact report, the extra time people have as a result of self-isolation has boosted some forms of entertainment more than others – with games, video and news the biggest winners so far.

midia research - the covid bounceTo further illustrate these trends, MIDiA compiled selected Google search term data across the main entertainment categories. The chart below maps the change in popularity of these search terms between the start of January 2020 up to March 27th. Google Trends data does not show the absolute number of searches but instead an index of popularity. These are the key findings:

  • Video streaming: All leading video subscription services saw a strong COVID-19-driven spike, especially Disney+ which managed to coincide its UK launch with the first day of national home schooling.
  • Music streaming: Little more than a modest uptick for the leading music services, following a long steady fall – reflecting a mature market sector unlike video, which has been catalysed by major new service launches.
  • Video demand: With the mid- to long-term prospect of a lot more time on their hands, consumers have been strongly increasing searches for TV shows, movies and games to watch and play. The fact that ‘shows for kids to watch’ is following a later but steeper curve reflects the growing realisation by locked-down families that they have to stop the kids going stir crazy while they try to work from home.
  • Music demand: Demand for music has been much more mixed, including a pronounced downturn in streams in Italy. Part of the reason is that music is something people can already do at any time in any place. So, the initial instinct of consumers was to fill their newfound time with entertainment they couldn’t otherwise do at work/school. As the abnormal normalises music streaming will pick up, as the recent increase in searches for music and playlist terms suggests. Podcasts, however, look like they will take longer to get a COVID bounce.
  • Games: Games activity and revenues have already benefited strongly from the new behaviour patterns, as illustrated by the fast and strong increase in search terms. However, the recent slowdown in search growth suggests that the increase in gaming demand may slow.
  • News: The increased searches correlate strongly with the growth of the pandemic, but the clear dip at the end provides the first evidence of crisis-fatigue.
  • Sports: The closure of all major sports leagues and events has left a gaping hole in TV schedules and the lives of sports fans. The sudden drop in search terms shows that sports fans have quickly filled their lives with other entertainment and have little interest in keeping up with news of sports closures.
  • Leaders: Finally, Boris Johnson has seen his search popularity grow steadily with the pandemic, while Donald Trump’s has dipped.

The COVID Bounce: How COVID-19 is Reshaping Entertainment Demand

The economic disruption and social dislocation caused by the COVID-19 pandemic is not evenly distributed. Some business face catastrophe, while others thrive. Across the entertainment industries the same is true, ranging from a temporary collapse of the live business through to a surge in gaming activity. As we explain in our free-to-download COVID-19 Impact report, the extra time people have as a result of self-isolation has boosted some forms of entertainment more than others – with games, video and news the biggest winners so far.

midia research - the covid bounceTo further illustrate these trends, MIDiA compiled selected Google search term data across the main entertainment categories. The chart below maps the change in popularity of these search terms between the start of January 2020 up to March 27th. Google Trends data does not show the absolute number of searches but instead an index of popularity. These are the key findings:

  • Video streaming: All leading video subscription services saw a strong COVID-19-driven spike, especially Disney+ which managed to coincide its UK launch with the first day of national home schooling.
  • Music streaming: Little more than a modest uptick for the leading music services, following a long steady fall – reflecting a mature market sector unlike video, which has been catalysed by major new service launches.
  • Video demand: With the mid- to long-term prospect of a lot more time on their hands, consumers have been strongly increasing searches for TV shows, movies and games to watch and play. The fact that ‘shows for kids to watch’ is following a later but steeper curve reflects the growing realisation by locked-down families that they have to stop the kids going stir crazy while they try to work from home.
  • Music demand: Demand for music has been much more mixed, including a pronounced downturn in streams in Italy. Part of the reason is that music is something people can already do at any time in any place. So, the initial instinct of consumers was to fill their newfound time with entertainment they couldn’t otherwise do at work/school. As the abnormal normalises music streaming will pick up, as the recent increase in searches for music and playlist terms suggests. Podcasts, however, look like they will take longer to get a COVID bounce.
  • Games: Games activity and revenues have already benefited strongly from the new behaviour patterns, as illustrated by the fast and strong increase in search terms. However, the recent slowdown in search growth suggests that the increase in gaming demand may slow.
  • News: The increased searches correlate strongly with the growth of the pandemic, but the clear dip at the end provides the first evidence of crisis-fatigue.
  • Sports: The closure of all major sports leagues and events has left a gaping hole in TV schedules and the lives of sports fans. The sudden drop in search terms shows that sports fans have quickly filled their lives with other entertainment and have little interest in keeping up with news of sports closures.
  • Leaders: Finally, Boris Johnson has seen his search popularity grow steadily with the pandemic, while Donald Trump’s has dipped.

COVID-19’s Impact on Streaming: It’s Complicated

One of the logical conclusions to draw about the impact of COVID-19 (also known as the coronavirus) is that the extra time people are spending at home will result in a boom for home entertainment. There are already strong signals that this is happening, with TV ratings up, TV news viewing up and Netflix doing so well that it has had to agree to reduce streams in Europe from HD to SD to reduce strain on the broadband networks. So, the natural assumption would be that music streaming would see a bump too. The consensus is that there isn’t a consensus (see here, here and here). The data is mixed. There are signs of uplift, and there are signs of decline.

What is going on? The answer lies in how you view the trends. This is not a dynamic that can be understood properly by observing macro trends; instead it requires micro-trend analysis. It turns out that COVID-19 is creating different entertainment responses not just across different countries, but among different segments of consumers within countries.

Cultural impact

The first factor to consider is the work and entertainment culture of a country. Take the example of Italy, which has seen a fall in streams. Italy is a very formal work culture, which means that listening to music in many workplaces is a big no-no. The commute was therefore the one part of the workday that workers got to stream. The commute has, of course, disappeared with COVID-19. You might think that freed from the constraints of a strict workplace, work-from-home (WFH) workers would listen to music during the day. Some might – but there are other factors at play:

  • Streaming is still relatively nascent in Italy, so behavior patterns are not well established. It is just not as natural for people to stream at home as it is in markets where people have been streaming for longer. Many still have home stereos they use at home.
  • Italy has a big linear TV culture, so WFH workers are more likely to have the TV on in the background than in many other countries.
  • People want to keep in touch with the latest news developments so are likely to have radio or TV news on in the background.

All these factors interplay and affect different people differently, but the combined effect in Italy is to have caused a streaming dip. Once crisis-fatigue kicks in people will consume news less and, if the outbreak persists long enough, TV broadcasters will start stuffing the schedules with re-runs because the supply of new shows will dry up due to the disruptions to filming and production. Italy may be down now, but it will pick up – though maybe not fully until everyone is commuting to work again.

Passion points

In other, more established streaming markets, labels we have been speaking to have seen an uplift in streams. Even in these markets, however, the macro picture obscures a much more complex micro picture. The key factor at play is passion points. We all have things that we love doing and, given more time in the day, we will fill it doing those things. If you are a music subscriber who is also a gaming aficionado then you are more likely to spend your newfound commute time on your console or gaming PC. This could actually mean a reduction in streaming if you were already listening to music in the workplace.

If the COVID-19 pandemic persists for months, then the other challenge labels will face is gaps in their frontline release schedules due to studios being closed down. It may well pay to shift some of the frontline marketing budget into catalogue marketing – not just for the classic gems, but also to boost still-popular two-to-five year old tracks that may technically be catalogue by industry definitions, but to consumers are just tracks they still like. Meanwhile, if COVID-19 causes long-term economic dislocation, streaming services will start having to fight churn rates as consumers trim their spending. Some bold thinking will need to be done around retention tactics, such as a three-month payment holiday for subscribers that try to cancel. Whether labels would be willing to fund such promotions is another issue entirely, but the key question is how much are those billing relationships worth?

The MIDiA team has been busy working on recession impact research for six months now, so we already have a library of data and reports to help our clients plan their way through these unprecedented times. In addition, during this period we will be creating regular COVID-19 reports. We will be publishing a major 5,000 word report on COVID-19’s impact on all media industries to our clients later today. In addition, we want to support the wider business and creative communities in their efforts to get through what is an unnerving and uncertain time in so many ways. Hence, we will also be creating a free-to-access version of the report to be released this coming Monday. Watch this space for more details on how to get it.

Stay well and healthy.