Online video use quadrupled during the lockdown, according to Limelight, led by more than 50% of consumers using video chat every day. Internet TV also contributed to the increase, and SVOD saw churn grow too. And the economic downturn could impact subscriptions later in the year, though pay TV will suffer far more than online TV.
Online Video use quadruples during lockdown
Limelight asked consumers how much online video they were consuming in a multi-country survey administer between April 29th and May 14th, 2020. When compared to a similar mid-2019 study, 2020 usage increased dramatically. Overall, the global average daily online video consumption increased from 1 hour in 2019 to more than 4 hours at the end of the first quarter of 2020. Japanese consumers showed the most significant increase, growing from 42 minutes a day to just under four hours. In the U.S., the growth was similarly massive, increasing from one hour and twelve minutes to three hours and 48 minutes.
Video conference a key driver of online video
Though online TV services were certainly responsible for some of the increase, a lot of the growth came from other video uses. With many people forced to work from home, the use of video chat has become commonplace. Across all the countries surveyed, 27% said they used video chat multiple times a day. What is more, over half said they used video chat at least once per day. Only 11% said they had not used video chat throughout the pandemic.
Other uses that saw dramatic increases in usage include virtual concerts, eSports, and eLearning. For example, 31% globally said they had their first eSports experience during March and April. 44% said they attended their first virtual concert.
It seems like these new virtual experiences have been incredibly positive. Over 80% said they would choose to attend a virtual event in the future.
SVOD/AVOD use up, churn up too
That is not to say that online TV services have not been an important factor during the pandemic. New data from Deloitte shows that about 80% of U.S. consumers subscribe to at least one SVOD service, up from 69% last year. Moreover, the average American subscribes to four different services, up from the 2019 average of three. Free ad-supported TV services were also popular during lockdown, with 47% saying they used them in March and April.
With consumers spending more time at home, they also had more time to try out services. Understandably, the trial activity has led to an increase in service cancellations. Before the pandemic, 20% of SVOD customers said they had canceled a service within the previous year. Since the start of the epidemic, 17% said they had canceled a service.
The impact of the economic downturn
Deloitte warns there could be further SVOD cancellations later in the year. It says that 39% of U.S. consumers said they had seen a drop in their income since March. However, the belt-tightening could impact expensive pay-TV subscriptions far more than cheaper SVOD. 65% of U.S. homes still have cable, satellite, or telcoTV, and the average home is spending around $100 a month for pay TV. Moreover, the increased usage of online TV could have shown many people that life without cable TV was now possible.
It seems like legacy pay TV companies are resigned to the fact that subscriber losses could be the same or worse than the 2.2 million that left in the first quarter. Michael Cavanagh, Comcast’s CFO, warned an industry audience to expect second-quarter losses to be at least as high as the first quarter. Comcast lost over 400,000 video customers in Q1, more than three times the decline in Q1 2019.
Why it matters
Online video usage has seen a 4X increase over the last year, though video chat looks to be a key driver of the trend.
SVOD and AVOD usage also increased, though SVOD churn also grew.
The economic downturn could lead to more subscriber cancellations later in the year, though pay TV is liable to suffer much more than SVOD.