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Netflix, Showmax numbers surge on COVID-19 lockdown

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Video-streaming service interest has risen locally and globally, in some instances doubling from pre-COVID-19 crisis peaks.

Worldwide interest in Netflix has grown by 142% amid the coronavirus pandemic and Showmax says the unfolding of the virus situation has significantly impacted viewing behaviour, and the number of active users is up 50%.

Data gathered by financial publication Learnbonds indicates global interest in streaming platform Netflix has risen by 142% over the last year. According to the data, a significantly larger number of people were interested in the platform from the first week of March 2020.

Equally, MultiChoice’s Showmax says there was a big jump on Friday, 27 March, and the upward trend has continued from there.

“The number of active users on Showmax is roughly 50% higher now than the pre-crisis peak in early March,” says Showmax.

Boom time

Analysts agree the streaming services have been among four categories of tech businesses that have experienced boom times with the advent of social distancing and lockdowns globally.

Arthur Goldstuck, MD of Worldwide Worx, says: “Along with video-conferencing, cloud computing, and gaming, video-on-demand would naturally boom as people withdraw from the outside world, and take both their work and entertainment lives fully into their homes.

“Social media platforms may see an increase in use, but since they depend on advertising revenue, and advertising has plummeted, they face the challenge of having to scale-up infrastructure even as revenues decline.”

“Traffic on the Internet and traffic on OTT [over-the-top] platforms in general was expected to peak since lockdown, as the school kids are home and adults in most households are working from home,” says another industry watcher, Nozi Dikgale, a researcher and media analyst at Africa Analysis.

“So the lockdown has had a positive impact on both OTT and video-streaming platforms. To respond to the needs and the anticipated video consumption online, DStv Now, Netflix, Showmax and YouTube have reduced the bitrate of video streams by 25%.”

At the start of March, Learnbonds says, Netflix searches had a popularity score of 75 which later grew by 17.3% the following week. During the last week of March, the searches slightly grew to 89.

By the first week of April 2020, the popularity score was at its peak of 100, a growth of 12.3% from the last week of March and 142% from a similar period last year, it notes.

According to Learnbonds, an overview of the searches between April 2019 and February this year shows the popularity score was at 41 on average.

The publication says the spike in searches correlates with the period when the world began feeling the effects of the COVID-19 pandemic and most people were encouraged to stay at home as a precautionary measure.

“Generally, Netflix is an important beneficiary of the change in behaviour the pandemic has prompted. The company has seen a spike in users in regions that have been hit hard by the coronavirus.”

Local consumption

In SA, Netflix competes against the likes of MultiChoice’s Showmax, among other OTT service providers.

Last month, president Cyril Ramaphosa declared the COVID-19 pandemic a national disaster, which was followed by a 21-day national lockdown. With the lockdown, most people are now working from home and schools are closed.

Among other things, the resultant effect of this has been a surge in streaming services.

Niclas Ekdahl, CEO of connected video division at MultiChoice, says: “We’re in the fortunate position of being able to do something to help people through this period. We’ve added live news and education channels to Showmax using the streaming functionality originally set up for sport.

“We’ve also created edutainment content rows to help parents, and we’re even adding yoga and other exercise programming. At the same time, we’re managing our traffic load on mobile networks to make sure Internet access isn’t interrupted, and we’ll keep looking for other opportunities to make a difference.”

According to Showmax, one of the key video-on-demand indicators measured is the number of unique active users, or in other words, the number of people who use a service on a given day.

“For Showmax, this number typically follows a weekly pattern with lulls on Wednesday and Thursday, and viewing then building from Friday to a peak on Sunday.”

Going forward, Goldstuck believes there will be massive appetite for out-of-home entertainment, and social distancing will remain a priority for a while, meaning these services will continue to thrive.

“After the crisis is over, it is natural that a sizeable proportion of new users will cancel these services. However, the spike in subscribers will have long-term benefits for the streamers, as they will have locked in a significant jump from pre-COVID-19 to post-COVID-19 numbers. It is that comparison we must watch, rather than the dip that can be expected from in-crisis to post-crisis numbers,” he explains.

Dikgale agrees: “I see the trend of video consumption and other usage of digital channels will continue to see growth and more traffic will increase across various digital platforms during this time of lockdown.”

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