The pandemic has made being a couch potato a very normal and, if you will, a life-saving activity. As different tiers of lockdowns are imposed/ removed/ imposed again around the world, one sure thing that is keeping everyone sane is on-demand access to entertainment.
Catch you at the home cinema!
Remember the last time you went to a theater to watch a movie? Neither do we! In fact, most people will be hard-pressed to answer that question.
The demand for watching movies in theaters has practically banished since last year. Sure, there will be enthusiasts who genuinely appreciate the cinematic experience, but the general public seems adamant at choosing OTT platforms instead.
OSN, Starzplay, Netflix, Amazon Prime, Disney+, and Hulu all experienced growth in 2020. There are two reasons for this. Firstly, it is cheaper for viewers since they are likely already paying a fixed-fee subscription to at least one OTT platform (not to mention no temptation to purchase overpriced snacks to complete the cinematic experience). Secondly, it is more convenient for viewers as OTT platforms eliminate the need to commute to a theater, reschedule other activities around movie timings, and watch unnecessary commercials. After all, isn’t the whole point of “on-demand” that you can hit pause when you need a toilet break without missing a beat of action?
Moreover, movie production houses have recognized this trend and are either releasing movies directly on OTT platforms or in conjunction with movie theaters. Warner Brothers, for example, have agreed to release all their upcoming movies on HBO Max alongside theater releases. In other words, OTT platforms are vested with equal importance, if not more, otherwise companies in the industry risk threat of bankruptcy (let’s avoid another AMC case).
Audio gives video a run for its money
We bet you don’t remember the last time you went to a concert either, right?
Demand for live music festivals around the world has also seen better days since 2020 due to social distancing norms. But, the music industry has evolved as well, using streaming platforms to launch new music and host virtual concerts (did anyone catch Travis Scott on Fortnite?). And so, music streaming apps such as Spotify, Tidal, and Amazon Music Unlimited are expected to dominate the industry in 2021.
Moving to another form of audio – what the internet was to knowledge, the pandemic has been for podcasts. While podcasts were on the rise prior to the pandemic, their popularity soared during the lockdown. The mushrooming of podcasts in 2020 was primarily driven by the “intimate” nature of podcasts. After all, when human interactions are limited, why not jump in the middle of someone’s conversation by simply putting your earphones on?
Even though podcast listeners are a relatively more loyal form of followers (there is a reason why podcast listeners are called followers and not fans), the industry has been under-funded so far due to the lack of clear monetization formulae. Regardless, heavy-hitting streaming platforms like Spotify and Amazon have made serious investments in the podcast industry (e.g. Gimlet and Wondery respectively) since last year due to its potential, and we can only expect more big money to flow into the industry in 2021 (starting off with Shuaa Capital’s investment in Anghami in MENA).
Entertainment you really would consume (your data wouldn’t lie)
The secret sauce in the success of all OTT platforms is the recommender systems that underpin their technology, which helps them predict what their consumers may like based on their past choices. Netflix pioneered this form of machine learning as it harnessed the collective power of people’s ratings and relevant metrics to foretell the next binge-watch-worthy series, as well as to aid the creation of its own series of successful original productions (doesn’t count as cheating the system, does it?).
In the audio industry, Spotify uses similar methodologies to curate music and podcast playlists.
As consumers spend more time on streaming platforms, their profiles with these companies only get richer, which means that the content they are suggested to consume will likely be more appealing, which will encourage even more consumption, and so on. Therefore, look out for advancements in the technology that OTT companies use, as well as the companies that are providing them with these services from all areas from content (take Roku’s acquisition of Quibi) to experience.