Declared a pandemic by the World Health Organization, the novel coronavirus COVID-19 spread across the globe, taking an undeniable toll on people’s wellbeing, livelihood and economy at large.
As the virus continues to rampage and no viable cure yet, public health officials are calling for people to reduce contact with each other. China quarantined 56 million people, in the largest quarantine in human history.
In the United States, the Center for Disease Control is advocating social distancing, reduced gatherings and remote working, to limit people from interacting too closely and spreading the virus.
In response, schools have closed in New York, Pennsylvania and Washington. Universities are implementing online learning programs, with Harvard asking their students to move to a virtual learning environment, and not to return to school after spring break. Globally, the United Nations has reported that 22 countries across three continents have closed their schools as a result of COVID-19.
People are canceling flights, New York has shut down the Broadway Theatre, korean band BTS has canceled its shows in South Korea, schools are moving online and employers are asking their staff to stay home to work.
While it is unclear at the moment the exact economic impact of the coronavirus, it’s quite obvious that for some companies, especially those in the manufacturing and travel and tourism sectors, the panic has definitely had a negative outcome. Apple missed revenue guidelines for March 2020, citing disruption in manufacturing and lower sales due to the outbreak. Major Asian airlines like Cathay Pacific, Singapore Airlines and Malaysia Airlines have already asked staff to volunteer to take unpaid leave due to a significant drop in demand for flights.
However, the advocacy for remote working and self-quarantine means that people will spend a lot more time at home, and this may actually be good news for certain companies, especially those in the digital media industry.
The rise of the Homebody Economy
The term “Homebody Economy” refers to a rise in the use of on-demand streaming services, food delivery, online education, online shopping, remote working, gaming apps and even online medical diagnosis. The term originally referred to younger females who preferred staying indoors for relaxation and entertainment. However, the COVID-19 outbreak has expanded the demographics of those who stay indoors and who now participate in the homebody economy. In China, people have been asked to stay home since January 2020. As a result, the homebody economy is booming. And as the rest of the world follows China’s example, we can expect that digital and online service companies like Netflix, Facebook, Boku and Amazon will benefit from the rise of a population that spends most of its time indoors.
James McDonald, managing editor of WARC Data, says that restrictions on movements and large gatherings will have a negative impact on cinema, out-of home advertising and even radio since so much of radio is consumed during commutes. However, time spent at home would mean more time spent on streaming services, social media and mobile games, which could see increased ad investment. Delivery services like UberEats and Grubhubs may see a rise in consumership.
Online streaming services will see a jump
People at home will mean an increase in demand for online streaming services. Streaming giant Netflix is poised to be a big beneficiary. It generated more than $20 billion in revenue in 2019 and added 7 million subscribers during the first quarter of 2020. Michael Olson, an analyst at Piper Sandler projects a 3.8% subscriber growth in the second quarter, more than twice the consenseus levels projected by Wall Street, due to the coronavirus outbreak keeping people at home. Other beneficiaries will be Comcast and AT&T, Disney Plus, Comcast’s Peacock, AT&T’s HBO Max, to name a few.
Podcasts should also see a rise in listeners. 49% of podcast listening already takes place at home. As we see more and more people staying at home, whether by choice or by decree of their companies and governments, it is very likely that this number will rise exponentially. It is also likely that we’ll see more people producing podcasts; after all it’s an audio-only content form that doesn’t cost much to start. All that is needed is a mic and editing software to record and episodes can be uploaded with a service like Backtracks and Backtracks Switchboard providing data, analytics, and a beautiful player. It also isn’t difficult to have a “guest” on the show. They don’t have to be physically present; it is easy to record a call (audio of a video call for example) then publish after editing.
Remote working requires special tools
A side effect of remote working is people beginning to see how many “mandatory” meetings can actually be replaced by an email or at most, a video conference call. As we see remote work increasing, so to will the use of tools that assist in people staying connected. For example, Zoom which is a cloud platform that offers video and audio conferencing for meetings and chat. It has added more than 2.22 million users as of March 5, 2020, more than the entirety of 2019. Tools that aid collaboration like Slack and Trello should also see a rise as people adjust to getting work done while being stuck indoors.
Social media as a way to curb loneliness
Humans are not meant to live for a long time in isolated conditions, and social media is one way for people to reach out and connect. People in China are using social media to share about their lives during quarantine, sharing everything from how their lives have changed to how they’re using the limited food ingredients available to cook creatively. As the quarantines continue, we expect that people will continue using social media platforms like Facebook, Twitter, Reddit, Tiktok and more to share information, air their anxieties and pass time. However, while social media is useful as a way to disseminate the latest information on the virus, the platforms are also hubs of misinformation that are potentially dangerous.
In conclusion, while COVID-19 is a disrupting force that has upended the way people live their lives, it is predicted that the rise of imposed social distancing will result in people spending more time at home. This will in turn drive the consumption of digital media content like Netflix, podcasts, online shopping platforms, social media and digital working tools.