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14 Dec 2024 18:07

Mobile & Digital

Digital is critical for those in self-isolation

COVID-19 is on everybody’s mind and will certainly remain so for months, quarters, and years to come. The coronavirus outbreak will have many impacts on multiple industries, some extremely negative but also some positive.

Digital services are becoming critical to our society as many go into self-isolation to fight the spread of the virus. From the ability to communicate with loved ones or share a coffee remotely with colleagues via video conferencing, to entertaining the whole family with premium TV content and video games, the demand for digital is set to increase tremendously in the next few weeks. Many service providers have responded with free broadband and pay-TV package upgrades to help their consumers survive this new situation. Figure 1 is an extract from Omdia’s upcoming report on the impact of COVID-19 on consumer services. The outbreak will create some short-term opportunities in a number of areas including e-commerce, OTT video, and mobile apps but those will be short-lived as people return to some sort of normality around early 2021.

Video calling is more popular than voice calling on mobile messaging apps

The key question is which effects will last beyond 2020. Let’s start with economy. It is anticipated that the COVID-19 outbreak will initiate a global recession despite the financial packages and measures offered by many governments around the world. Industries such as tourism, transportation, and hospitality will simply fail and significantly affect consumer demand. Deutsche Bank recently updated its forecast on March 18 for 2Q20 predicting that euro-area GDP and US GDP will drop 24% and 13% year-on-year, respectively. Many financial institutions still forecast global GDP growth in 2020, anticipating a huge rebound in the second half of the year but this will be highly dependent on the effectiveness of social distancing measures. The economic outlook will have a fundamental impact on advertising spend and therefore on all consumer services which depend on it fully or partly, such as social platforms, free-to-air TV, and free OTT video services.

Another lasting effect to consider is how self-containment will make people aware of alternative ways of doing things which they may choose to continue after the crisis is over. One obvious example is working from home and how this might affect the future of work. On the media side, people will be more inclined to experience new services especially in OTT video. Smart home technology such as smart displays, video doorbells, and AI assistants will see increased adoption and find more uses among consumers.

Doing things differently tends to be enlightening as many unexpected outcomes emerge. One thing for certain is that digital will become critical and this should be seen as a positive gain for the industry, although this may translate into financial gains much later than anticipated.

 

Source: Omdia

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