Are consumer spikes in teleconferencing, video streaming, and direct-to-consumer (D2C) shopping a temporary result of the stay at home order or are these trends here to stay?
Over the past several months of the stay at home and lockdown orders, consumers have been forced to rely more heavily on technology to stay connected and entertained. From greater reliance on online buying, buy online/pickup-in-store (BOPIS), buy online/return-in-store (BORIS), new video conferencing technology, and leveraging the IoT, we have witnessed an increase in consumer tech-savviness. As a result, this has greatly accelerated trends in the media industry; events that were once expected to happen in the next 15 years, now may happen within the next 15 months. Some of these trends include:5G/Data needs:With individuals being confined to their homes, a greater emphasis has been placed on increasing bandwidths, especially for higher quality 4K+ imaging and improved gaming experiences.Cutting the Cord:As discretionary spending drops, increases in subscription video on demand (SVOD) and virtual multichannel video programming distributor (vMVPD) spending have occurred. For instance, Netflix has added 15MM+ users during lockdown alone, while broadcast cable providers are seeing ~10% subscriber declines.Shifts in distribution:The direct launch of the Trolls movie to home streaming services put historical theaters in jeopardy. While consumers will likely return to theaters once COVID-19 is behind us, the industry as a whole will most likely suffer a marked step down in terms of audience and business viability.IoT 2.0:Consumers have begun to shift beyond the initial mobile and voice-activated phases of “Hey Google” and are now seeking the next generation of products that bring business intelligence and convenience to life.Rise in Engagement/Personalization:From customized Zoom backgrounds, to unique Netflix content offerings, to BitMojis in social media and gaming, consumers are seeking a more personal digital footprint to define their self and interests.Regardless of where media companies play within the tech space, these shifts and accelerations of consumer habits are here to stay. For these firms, this creates a need to continue to evolve with consumers as they embrace digital consumption of media and allocate greater budgets for streaming, wireless, and entertainment. Those that wish to remain competitive must focus on traditional CPG style offerings, providing competitive pricing, innovative products, accessibility, and unique content/IP features to their customers.To learn more about Kearney's Communications, Media, and Technology practice, please visit our sitehere.