Connect with us

Reports

COVID-19 Accelerates Cycle of Paid Entertainment Subscriptions and Cancellations

Newsroom

Published

on

U.S. consumers had an average of 12 paid media and entertainment subscriptions pre-COVID-19.

Eighty percent of U.S. consumers now subscribe to a paid streaming video service. Subscribers pay for an average of four services, up from three pre-COVID-19.

In just a few months, since the COVID-19 outbreak, 17% of current subscribers cancelled a paid streaming video service.

Forty-seven percent of U.S. consumers cited using at least one free ad-supported streaming video service during the pandemic as they search for budget-friendly entertainment.

Thirty-eight percent of consumers have tried a new digital activity since the pandemic began, such as watching a livestreaming event.

Fifty percent of Millennials would be willing to attend a sporting event in the next six months, compared with just 28% of Boomers.

A third of U.S. consumers and nearly half of Gen Z and Millennials say that video games helped them get through a difficult time.

Why this matters
Deloitte conducted a pre-COVID-19 survey December 2019 – January 2020 and a second survey in May following the onset of the pandemic. Together, the surveys provide insight into how media consumption has changed. Deloitte found trends that were present pre-COVID-19 have accelerated, sometimes dramatically, in a short time.

Consumers have more time on their hands to watch, listen and play games. At the same time, it’s harder to keep customers as they can easily sample services via subsidized trial offers with no fear of penalties for cancelling. The pressures are likely to mount as consumers have less money to spend, with 39% of consumers reporting a decrease in their household income since the pandemic began. Media and entertainment companies can take this unprecedented moment to ask insightful questions and reevaluate their business in order to take advantage of windfalls, recover from setbacks, and thrive in the decade to come.

Subscriptions continue to swell, in spite of fatigue
Pre-pandemic, the survey found consumers were still enjoying digital entertainment more than ever and were willing to pay for multiple subscriptions. This trend has continued during the pandemic. However, there is growing frustration in trying to navigate the flood of streaming options, all while trying to manage costs. This fatigue may lead to increased cancellations. The May survey found that some consumers sign up for free trials, cancel when the trial ends or a favorite show or series is completed, and switch services in search of fresh content.

  • Pre-COVID-19, the average U.S. consumer had 12 paid entertainment subscriptions. Millennials averaged 17 subscriptions, Gen Z had 14, while Gen X had 13. Twenty-seven percent of consumers, including 42% of Millennials, said they planned to subscribe to more services in the coming year.
  • Pre-COVID-19, 40% of millennials were “overwhelmed” by the number of subscription services they manage, and 43% intended to reduce them.
  • Since the pandemic began, consumers have added and cancelled subscriptions of all kinds. For example, 20% of U.S. consumers made changes to their streaming music subscriptions: 12% added at least one music service, 5% cancelled at least one, and 3% added some and cancelled others.

Streaming video trending upward; will it sustain?
Not only do more consumers have streaming video services, the average streamer pays for more services than ever. However, as more media providers join the fray, competition is growing and putting pressure on content and pricing. Additionally, when COVID-19 restrictions are lifted, consumers may reduce their subscriptions as they turn their time and attention to other activities.

  • Eighty percent of U.S. consumers say their households now subscribe to at least one paid streaming video service, up from 73% in the pre-COVID-19 survey.
  • Subscribers now have an average of four paid streaming video subscriptions, up from three in the pre-COVID-19 survey.
  • Pre-pandemic, 27% of U.S. consumers said they plan to add a new streaming video service in the coming year; since COVID-19, 32% have added at least one new paid streaming video service.
  • Nearly 70% of Boomers now have a paid streaming video subscription.
  • For nearly a quarter of subscribers, a free or discounted rate was a big factor in choosing a paid streaming video service.
  • Subscribers are drawn to streaming video services with a broad range of shows and movies (51%) and content they can’t get anywhere else (45%) — both originals and old favorites.
  • In the earlier survey, 20% of streaming video subscribers cancelled at least one service in the past year. Since the pandemic began, 17% of subscribers have already cancelled a service.
  • High costs (36%) and expiring discounts or free trials (35%) were cited as the top reasons for cancellation.

Ad-supported video streaming: battle of the business models
Ad-supported video streaming services may be gaining traction as some consumers would rather watch a certain level of advertising to reduce the cost of a subscription, or watch for free. Providers should consider which business model will resonate best with different consumers as they fight for viewers.

  • During the pandemic, nearly half (47%) of consumers cited using at least one free ad-supported streaming video service.
  • More U.S. consumers want access to cheaper, ad-supported streaming video options, both before (62%) and since the COVID-19 pandemic (65%), while 35% of consumers don’t want ads and will pay to avoid them.
  • Gen Z and millennials are more likely than older generations to prefer the subscription-only model they grew up with; Boomers and Matures like the ad-only option that closely resembles TV.

Binge gaming booms during the crisis
Consumers have been spending more time playing video games, especially during the pandemic. Video gaming has become a social experience, but also a family experience as more kids and teenagers embrace it and draw in their parents as well. In fact, a third of U.S. consumers and nearly half of Gen Z and Millennials say that video games helped them get through a difficult time.

  • Earlier this year, 24% of consumers surveyed listed playing video games among their top three favorite entertainment activities. For Gen Z and Millennials, it was 44% and 37% respectively.
  • In that same survey, 29% of consumers noted they were binge gaming weekly, for an average of 3.3 hours per session.
  • Since the crisis began, nearly half (48%) of U.S. consumers have participated in some form of video gaming activity. For Millennials, it is 69%, and for Gen Z, it is 75%.
  • In fact, 29% of U.S. consumers said they are likely to use their free time to play a video game than watch a video.
  • Seven percent (7%) subscribed to a video gaming service for the first time during the pandemic.
  • Among those participating in video gaming activities during the pandemic, 34% are playing video games at home with their families much more, and 27% are playing to socially connect with others.
  • Prior to COVID-19, 25% of consumers watched live-streamed and recorded video of others playing games. For Millennials and Gen Z, it was around 50%. These numbers continue to hold strong during the pandemic.

What does the future hold?
The pandemic has created conditions and opportunities for people to try new things as they search for ways to stay entertained during a challenging time. The question for service providers is will these new interests remain as consumers get back to normal, continue to grapple with economic hardship and become increasingly selective about the content they choose.

  • During the pandemic, 38% of consumers have tried a new digital activity or subscription for the first time.
  • The most popular activities are viewing livestreamed events and watching video with others through a social platform, web application, or videoconference.
  • More than two-thirds of consumers said they are likely to continue their new activity or subscription.
  • Twenty-two percent of consumers — 30% of Gen Z and 36% of Millennials — paid to watch a first-run movie on a streaming video service during the pandemic. Of those that did, 90% said they would likely do so again. Of those who did not, 42% of consumers said it was too expensive.
  • One-third of consumers noted they will not be comfortable attending live events for the next six months. Notably, 50% of Millennials and 47% of Gen Z would be willing to attend a sporting event in the next six months, compared with just 28% of Boomers.

Continue Reading
Comments

Reports

Collapsing consumer demand amid lockdowns cripple Asia-Pacific garment industry

Newsroom

Published

on

Women at work in a garment factory in Hai Phong, Viet Nam. © ILO

The COVID-19 pandemic has triggered government lockdowns, collapsed consumer demand, and disrupted imports of raw materials, battering the Asia Pacific garment industry especially hard, according to a new report released on Wednesday by the International Labour Organization (ILO).

The UN labour agency highlighted that in the first half of 2020, Asian imports had dropped by up to 70 per cent.

Moreover, as of September, almost half of all garment supply chain jobs, were dependent on consumers living in countries where lockdown conditions were being most tightly imposed, leading to plummeting retail sales.

ILO Regional Director for Asia and the Pacific, Chihoko Asada Miyakawa, pointed out that the research highlights “the massive impact COVID-19 has had on the garment industry at every level”. 

Ripple effect

In 2019, the Asia-Pacific region had employed an estimated 65 million in the sector, accounting for 75 per cent of all garment workers worldwide, the report reveals.

Although governments in the region have responded proactively to the crisis, thousands of factories have been shuttered – either temporarily or indefinitely – prompting a sharp increase in worker layoffs and dismissals.

And the factories that have reopened, are often operating at reduced workforce capacity.

“The typical garment worker in the region lost out on at least two to four weeks of work and saw only three in five of her co-workers called back to the factory when it reopened”, said Christian Viegelahn, Labour Economist at the ILO Regional Office for Asia and the Pacific.

“Declines in earnings and delays in wage payments were also common among garment workers still employed in the second quarter of 2020”.

Women worst impacted

As women comprise the vast majority of the region’s garment workers, they are being disproportionately affected by the crisis, the report tracked.

Additionally, their situation is exacerbated by existing inequalities, including increased workloads and gender over-representation, as well as a rise in unpaid care work and subsequent loss of earnings

Moving forward

To mitigate the situation, the brief calls for inclusive social dialogue at national and workplace levels, in countries across the region.

It also recommends continued support for enterprises, along with extending social protection for workers, especially women. 

The ILO’s recent global Call to Action to support manufacturers and help them survive the pandemic’s economic disruption – and protect garment workers’ income, health and employment – was cited as “a promising example of industry-wide solidarity in addressing the crisis”.

“It is vital that governments, workers, employers and other industry stakeholders work together to navigate these unprecedented conditions and help forge a more human-centred future for the industry”, upheld Ms. Miyakawa.

Nuts and bolts

The study assessed the pandemic’s impact on supply chains, factories and workers in Bangladesh, Cambodia, China, India, Indonesia, Myanmar, Pakistan, Philippines, Sri Lanka and Viet Nam.

It is based on research and analysis of publicly available data together with interviews from across the sector in Asia.

Continue Reading

Reports

A few ‘green shoots’, but future of global trade remains deeply uncertain

Newsroom

Published

on

Although global trade is making a frail recovery, the outlook remains uncertain, UN trade and development body UNCTAD said on Wednesday, in announcing its latest COVID-era update

Estimates show that world trade will drop by five per cent this quarter, compared with the 2019 level. While this is an improvement over the nearly 20 per cent decline in the second quarter of the year, it is still not enough to pull trade out of the red. 

Furthermore, UNCTAD expects the value of all good traded to contract by seven to nine percent compared to last year, depending on how the COVID-19 pandemic evolves in the winter months. 

Uncertainty aggravating trade 

“The uncertain course of the pandemic will continue aggravating trade prospects in the coming months”, said UNCTAD Secretary-General Mukhisa Kituyi. 

“Despite some ‘green shoots’ we can’t rule out a slowdown in production in certain regions or sudden increases in restrictive policies.” 

While the projection represents a decrease, the figure is a more positive result than previously expected, as UNCTAD had projected a 20 per cent year-on-end drop for 2020, back in June. 

Trade trends have improved since then, the agency added, primarily due to the earlier than expected resumption of economic activity in Europe and east Asia. 

China leads recovery 

The report points to China, which has shown a notable trade recovery. 

Chinese exports had fallen in the early months of the pandemic and stabilized in the second quarter of the year, before rebounding strongly in the next quarter, with year-over year growth of almost 10 per cent. 

“Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period”, the report said. 

Within China, demand for goods and services has also recovered.  Imports stabilized in July and August, and grew by 13 per cent in September.   

Growth and decline in Asia 

India and South Korea also recorded export growth last month, at four per cent and eight per cent, respectively. 

UNCTAD reported that as of July, the fall in trade was significant in most regions except east Asia.  

West and south Asia saw the sharpest declines, with imports dropping by 23 per cent, and exports by 29 per cent. 

The report also includes an assessment of trade in different sectors, with the energy and automotive industries hardest hit by the pandemic. 

Meanwhile, sectors such as communication equipment, office machinery, and textiles and apparel, have seen strong growth due to the implementation of mitigation responses such as teleworking and personal protection measures. 

Wealthy nations benefit from COVID-19 medical supply trade 

The report also gives special attention to COVID-19 medical supplies, which include personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and related hospital equipment. 

Between January and May, sales of medical supplies from China, the European Union, and the United States, rose from $25 billion to $45 billion per month.  Since April, trade has increased by an average of more than 50 per cent. 

However, the authors found wealthier nations have mainly benefited from this trade, with middle and low income countries priced out from access to COVID-19 supplies. 

Residents of high income countries have on average benefited from an additional $10 per month of imports of COVID-19 related products.  This compares to just $1 for their counterparts in middle income countries, and 10 cents for those in low income nations. 

 UNCTAD warned that if a COVID-19 vaccine becomes available, the access divide between wealthy and poor countries could be even more drastic. 

The report urges governments, the private sector and philanthropic organizations to continue mobilizing additional funds to fight the pandemic in developing countries and to support financial mechanisms that will provide safe and effective COVID-19 vaccines to poor countries

Continue Reading

Reports

COVID-19 crisis puts migration and progress on integration at risk

Newsroom

Published

on

Migration flows have increased over the past decade and some progress has been made to improve the integration of immigrants in the host countries. But some of these gains may be erased by the COVID-19 pandemic and its economic fallout. Governments need to secure the health and safety of all workers in essential activities and maintain spending on integration to help migrants continue to contribute to society and the economy, according to a new OECD report.

The OECD International Migration Outlook 2020 says that the COVID-19 crisis has had unprecedented consequences on migration flows. Before the pandemic, permanent migration flows to the OECD amounted to 5.3 million in 2019, with similar figures for 2017 and 2018. Although there were fewer refugee admissions, permanent labour migration rose by more than 13% in 2019 and temporary labour migration also rose, with more than 5 million entries recorded in the OECD.

Following the onset of the pandemic, almost all OECD countries restricted admission to foreigners.

As a result, issuances of new visas and permits in OECD countries plummeted by 46% in the first half of 2020, compared with the same period in 2019. This is the largest drop ever recorded. In the second quarter, the decline was 72%. Overall, 2020 is expected to be a historical low for international migration in the OECD area.

There are strong signs that mobility will not return to previous levels for some time. This is due to weaker labour demand, persistent severe travel restrictions as well as the widespread use of teleworking among high-skilled workers and remote learning by students.

“Migration will continue to play an important role for economic growth and innovation, as well as in responding to rapidly changing labour markets,” said OECD Secretary-General Angel Gurría, launching the report with European Commissioner for Home Affairs Ylva Johansson. “We need to avoid rolling back on integration and reaffirm that migration is an integral part of our lives.” 

Migrant workers have been on the frontline of the crisis. They account for a large share of the OECD medical workforce, with one in four medical doctors in the OECD, and one in six nurses. In many OECD countries, more than a third of the workforce in other key sectors, such as transport, cleaning, food manufacturing and IT services, are immigrants.

Yet immigrants are facing a hard time in the labour market. Much of the past decade’s progress in employment rates among immigrants has been wiped out by the pandemic. In all countries for which data are available, immigrants’ unemployment increased more, compared to their native-born peers. The largest increases for immigrants were observed in Canada, Norway, Spain, Sweden and the United States. In Sweden, almost 60% of the initial increase in unemployment fell on immigrants. In the United States, unemployment of immigrants was lower than their native-born peers by almost one percentage point before the pandemic, it is now 2 percentage points higher.

Migrants are highly exposed to the health impacts of the pandemic as a result of working on the frontline during the pandemic but also vulnerabilities linked, for example, to housing conditions and poverty. Studies in a number of OECD countries found an infection risk that is at least twice as high as that of the native-born. 

Going forward, getting migration and integration policies right will be essential if we are to achieve a strong and truly inclusive recovery.  

Continue Reading

Publications

Latest

Development1 hour ago

Pakistan: Stronger Public Financial Management and Digital Services to Support Growth

Today, the World Bank’s Board of Executive Directors approved $304 million in financing for Punjab Resource Improvement and Digital Effectiveness...

Environment3 hours ago

Vietnam Signs Landmark Deal with World Bank to Cut Carbon Emissions

Vietnam’s Ministry of Agriculture and Rural Development signed a landmark agreement today with the World Bank’s Forest Carbon Partnership Facility...

Eastern Europe5 hours ago

A Chill in Georgia-China Relations

A sense of growing disenchantment is starting to dominate China-Georgia relations. Given China’s ambitious Belt and Road Initiative (BRI) and...

South Asia7 hours ago

Immediate broad-based Reforms needed in the Political system of Pakistan

Opposition parties have launched a comprehensive campaign to de-seat the PTI Government by its grand show of power on 16...

Middle East9 hours ago

Is Syria Ready For Second Wave Of COVID-19?

Despite a relative calm that has been holding on the front lines of the Syrian conflict since the beginning of...

Europe11 hours ago

Could the EU Make its ASEAN Breakthrough with the Emerging Indo-Pacific Strategy?

The Indo-Pacific policy guidelines that was announced by the German Federal Foreign Office last week, is a clear signal from...

Reports13 hours ago

Collapsing consumer demand amid lockdowns cripple Asia-Pacific garment industry

The COVID-19 pandemic has triggered government lockdowns, collapsed consumer demand, and disrupted imports of raw materials, battering the Asia Pacific...

Trending