The market for streaming services grew by around 37% in 2020 and one big reason for this growth was the breakout year enjoyed by Disney+. However, there were several other key factors at work, too. For one, Disney wasn’t the only new player to enter the market. For another, more consumers are coming online every year, leading to an organic increase in demand. Without a doubt, though, last year’s X-factor was COVID-19.
The pandemic led to quarantine and lockdown measures all around the world. Theaters closed, sports were put on hold, and all kinds of other live events were scrubbed; even visiting friends and family was off-limits in many areas. This resulted in digital media becoming one of the only entertainment sources available for millions of people. Two things happened: many consumers who hadn’t paid much attention to video-on-demand (VOD) were brought into the fold, and those who were already there started looking for more content, pushing them towards new or different platforms.
Stats tell part of the story: After falling throughout all four quarters of 2019, annual increase in global subscription VOD rose to over 217 million in quarter 3 of 2020 – a historic increase – making for a total of nearly 770 million global subscriptions (up from 552 million one year prior). As COVID drove more and more viewers online, Netflix, Disney, Amazon, and Hulu all set various records via their streaming platforms.
Growth in streaming didn’t just involve existing players getting bigger, though. A whole range of new entrants filed into the marketplace. Following the launch of Disney+, Apple TV+, and Viacom’s BET+ in late 2019, HBO Max debuted in May 2020 from parent company AT&T, NBCUniversal’s streaming service, Peacock, debuted in July, and AMC Network’s AMC+, Allblk, and WeTV+ all joined the party – followed by the rebranding of CBS All Access into Paramount+ in March of 2021.
What does it all mean?
If nothing else, 2020 provided plenty of proof that the streaming market is nowhere near exhausted. There still may be the occasional plateau, but with service offerings exploding and billions of new internet users set to join the market over the next decade, the end isn’t anywhere in sight. Beyond that, as it did in countless other industries, COVID spotlighted existing strengths, weaknesses, and opportunities in streaming.
DEADLINE reported midway through 2020 that “churn” among streaming subscribers had risen to 41%, which reflects some viewer’s main complaints about VOD content. Viewers often feel unaware of what’s available, aren’t sure where to find it, and have a hard time choosing between platforms. All these things are understandable, considering that content is constantly shifting locations and streaming services tend not to tie directly to specific markets (although Disney+ has managed to do so, proving it’s possible).
Additionally, production teams experienced unforeseeable delays and streaming platforms were ushered into quick-draw negotiations with studios as theatrical releases were postponed or canceled. The Walt Disney Company once again scored big from its investment in Disney+, able to more or less seamlessly transfer several projected theatrical releases to the streaming platform instead. The takeaway here is that the streaming companies which were able to think outside the box and quickly pivot showed themselves to be the most future-fit and are most likely to survive the content streaming wars in the long run.
Bottom Line
Streaming and its audience are both growing. As more and more content comes down the pike, though, it’s harder for consumers to know what’s out there and to navigate the ever-changing dynamics of content providers, whether that’s on Hulu or YouTube. The changes that 2020 brought to streaming are important to providers because they’re indicative of what the market holds – and what it is missing. Those same changes are also important to consumers as they will spawn further investment (more and better content) and greater innovation (new ways to discover and share content).
It’s doubtful that we’ll look back on the COVID-19 pandemic with any amount of affection. But there is no denying the fact that in industries such as streaming, the pandemic greatly accelerated both transitions and innovations which will have long-term benefits for countless consumers.
