COVID-19 Market Impact: Digital Consumer Services - Omdia
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COVID-19 Market Impact: Digital Consumer Services Evaluating the impact of social distancing measures and a potential recession on digital services March 2020 Ronan de Renesse Practice Leader, Consumer Technology, Media & Entertainment ronan.derenesse@omdia.com CES004-000143 © 2020 Omdia Brought to you by Informa Tech
Contents • Catalyst • Omdia view • Recommendations • COVID-19 impact summary • COVID-19 global epidemic update • Consumer demand impact • Definitions and methodology Page 2 © 2020 Omdia Information Classification: General
Catalyst, Omdia view, and recommendations Page 3 © 2020 Omdia
Catalyst
• As the new decade dawned, the industry prepared to enjoy great prosperity through new technologies and digital services; then came
one of the largest and most disruptive virus outbreaks the modern world has ever seen. The World Health organization (WHO) declared
COVID-19 a global pandemic on March 11. While China is heading toward a steady recovery, Europe and the US have closed their
borders and are in the process of locking down tens of millions of people in order to contain the spread. Many governments are faced
with a difficult dilemma: Save as many lives as possible, especially among the most vulnerable, or protect the economy?
• The impact of COVID-19 on the global economy will be significant and cannot be avoided. Whether it will last a few months, a year, or
even longer remains to be seen. Precautionary measures are necessary to protect entire industries – including retail, commercial
aviation, tourism, and hospitality – from falling apart. The technology, media, and telecoms (TMT) industry may not be as much exposed
as these to the effect of social distancing and lockdowns, but there will be a significant impact on digital services consumption and
resulting revenue.
• This report evaluates the impact of COVID-19 on various digital consumer services segments such as mobile communications, mobile
apps, broadband, TV and video, digital commerce, advertising, and gaming among many others. Recommendations on how to respond
and prepare for those impending changes are provided throughout, along with some examples that have emerged in the past few days.
Page 4 © 2020 Omdia
Information Classification: GeneralOmdia view
• The anticipated impact of the COVID-19 pandemic on digital
consumer services is not trivial but not always negative.
• Today, most attention and responses are focused on the impact that
lockdowns and social distancing measures have on consumer
demand. Increased consumption of digital content from mobile
apps to TV and gaming has already been observed in China and Italy
and can mean as much as a 50% increase in traffic. However,
segments that rely on live entertainment such as esports, music,
and cinema will suffer greatly from loss of ticket sales.
• The deeper and more important outcome of the COVID-19
pandemic will be the effect it will have on the economy in the
longer term. At present, we expect that it will take 18–24 months
before recovery can begin.
• One positive aspect of the pandemic is that it will accelerate the
development of technologies that help the fight against it. For
example, artificial intelligence (AI) and smart home healthcare
services should benefit in the long term.
Source: Omdia © 2020 Omdia
Page 5 © 2020 Omdia
Information Classification: GeneralRecommendations for telecom operators
• Be transparent on 5G expansion delays. The frontrunners in 5G love to promote network expansion targets, but with a supply-side
crunch looming in some cases, telcos need to keep consumers up to date on changes to rollout maps or else risk a consumer backlash.
• Adjust expectations for moving 5G to the masses. Dampened confidence will mean consumers delay paying a premium for 5G,
particularly those waiting for cheaper smartphones to emerge in 2020. Short-term stimulus measures such as 5G-handset subsidies may
need to be considered to spur demand depending on the severity of any economic downturn in a particular market.
• Do not rule out short-time usage incentives. Among those stuck at home, there will be a tendency to use Wi-Fi rather than mobile data.
In turn, prepaid customers might be vulnerable to topping up less, so consider short-term offers to stimulate usage on the mobile
network, subject to network load.
• Dust off global mobile-revenue roaming projections. Telcos will need to lower roaming-revenue forecasts, particularly those outside the
EU (where roam-like-home tariffs exist). It is worth incentivizing consumer roaming packs when travel rebounds.
• Telcos should prepare their networks for increased remote working and home schooling. Government authorities are recommending
quarantine and self-isolation in areas of COVID-19 outbreaks, which will force work and schooling to go online where practicable. This
will result in increased network traffic as employees and students rely on primarily app-based voice and video calling and conferencing,
messaging, and content sharing to communicate and collaborate.
Page 6 © 2020 Omdia
Information Classification: GeneralRecommendations for telecom operators
• Demonstrate the technical capabilities of 5G and cloud technology to support VR/AR streaming. As companies make moves to reduce
their carbon footprint, international travel will continue to come under scrutiny. Virtual reality (VR) and augmented reality (AR)
technologies already offer early versions of next-generation telepresence solutions, providing a fertile ground for telcos and cloud
technology providers to prove how they can enable and support large number of concurrent users using VR/AR.
• Expand the assisted living product and service portfolio via strategic partnerships. Work not just with technology vendors but also with
healthcare providers to develop specific use cases for home healthcare. Target family members who are concerned about the well-being
of elderly relatives living alone at home.
• Offer a bundled media-streaming device. Facilitate increased broadband consumption (via connected TV) through a media streamer
bundled with increased speeds and network capacity.
Page 7 © 2020 Omdia
Information Classification: GeneralRecommendations for OTT service providers and platforms (1)
• Demonetize content on coronavirus. Brands are going to be cautious about allowing their content to appear alongside media on the
coronavirus. YouTube has already demonetized coronavirus-related content; social media platforms should do the same. Content from
authorities such as WHO, the US Center for Disease Control (CDC), and the UK National Health Service (NHS) should not be subject to
restrictions. Indeed, it should be promoted by social platforms.
• Improve detection and removal of misinformation, inappropriate ads, and opportunist sale of products hit by shortages.
Misinformation has a potentially serious impact on public health as does the encouraging of panic buying. Social platforms need to get a
grip on what content is being shared about COVID-19 on their platforms or risk the wrath of regulators already incensed by the
proliferation of “fake news.“
• App publishers should beef up their in-app offering to satisfy increased user engagement. People stuck at home in quarantine or self-
isolation are spending more time and money on mobile apps, so now is the time for app publishers to speed up the rollout of new in-app
features, content, and levels (e.g., games) to keep users engaged during this period of greater consumption.
• Like telcos, OTT communications apps should prepare to see their platforms being used to replace in-person communications.
Quarantine and self-isolation will greatly reduce personal contact. Communications apps will allow people to keep in touch with their
family, friends, and colleagues, so they must be ready to scale up their messaging, voice, video calling, and content-sharing capacity.
Page 8 © 2020 Omdia
Information Classification: GeneralRecommendations for OTT service providers and platforms (2)
• OTT communications apps should also prepare for their platforms to be increasingly used as boredom busters. People confined in
quarantine or self-isolation will lean heavily on their communications apps for entertainment including creating, sharing, and consuming
content; playing games; or online shopping. The COVID-19 pandemic provides an opportunity for OTT communications apps providers to
accelerate, iterate, or innovate product development in these areas.
• OTT video platforms should promote their services. Online video platforms should take the opportunity to market their services by
promoting exclusive content or original film to encourage subscriber uptake of online video platforms. Offering free access or extended
trial periods in affected areas will help services promote the brand and gain goodwill and subscriptions.
• OTT video platforms should promote transactional options. Online video platforms should promote transactional forms of
consumption, especially for new content, as cinemas are temporarily shutting down.
• OTT video platforms should be wary of ad-supported business models. In the short term, online video platforms with AVOD and SVOD
will benefit from the situation because of increased traffic. However, if the duration is prolonged, online video companies that focused
on advertising may suffer because of economic downturns.
• Expand presence on multiple app platforms. People now have access to an array of video-consumption platforms, so it is vital for
companies to make their apps present on the major app platforms including Android TV, Metrological, Apple, Roku, Amazon Fire, and
Vewd.
Page 9 © 2020 Omdia
Information Classification: GeneralRecommendations for OTT service providers and platforms (3)
• Help those unused to or new to e-commerce, particularly the elderly, onto the ladder. Make it easy to register, make sure payments are
simple and intuitive, and think of providing free delivery for physical goods during the pandemic (particularly if deliveries are likely to be
disrupted). Look at value-added services that make the e-commerce experience pleasurable and even more useful, for example, quick
and easy recipes that make the most of available ingredients.
• Convert the short-term upswing in e-commerce during the pandemic into a longer-term trend. Online service providers and commerce
players should look at how this change in consumer buying behavior can be harnessed beyond the pandemic, for example, by leveraging
personalization features more effectively, making flexible content offerings, or providing friction-free payment experience.
• Leverage technology to help your business and customers through the crisis. Analytics and predictive modeling based on machine
learning (ML) can help scenario planning and responses. AR can be used to enhance online shopping (e.g., trying clothes on, virtual
showrooms); conversational commerce (chatbots, voice, video) can be used as a sales and support tool to provide interactivity and,
ultimately, to help sustain relationships.
• Plan a logistics and fulfilment response before it becomes an issue. Benefits from an upswing in e-commerce will be seriously eroded if
commerce players do not plan for disruptions across the supply chain. Actions include everything from demand forecasting,
contingencies for delivery delays and stoppages, and planning how to minimize physical contact during the delivery process.
Page 10 © 2020 Omdia
Information Classification: GeneralRecommendations for OTT service providers and platforms (4)
• Continue to focus on “shoppable“ ad formats that facilitate e-commerce and food delivery. Despite the COVID-19 pandemic, people
will still want to buy products, but they will move an increasing amount of their purchasing activity online. Brands and retailers will
prioritize driving online conversions through digital ad campaigns, which will increase the value of commerce-focused inventory.
• AI can help online service providers and commerce players protect consumers in uncertain times. The increase in consumer online
activity during the pandemic will open the door for opportunistic and unscrupulous behavior, for example, disinformation, fake news,
exploitative advertising and trading, commerce scams, and fraud. AI can be harnessed to help combat these issues (e.g., biometrics for
enhanced security, ML for fraud detection and to monitor for disinformation about COVID-19).
• Give consumers AI-enhanced services to help them through the crisis in ways more standard applications cannot. AI can bring
capabilities to services and applications that can be particularly relevant and useful during the COVID-19 pandemic, including remote-
working apps, enhanced entertainment, and videoconferencing to name a few. A specific examples could be leveraging geo-intelligence
that could help keep track of the viral spread or, for areas not on lockdown, providing travel information, updates, and safety advice.
Page 11 © 2020 Omdia
Information Classification: GeneralRecommendations for media companies (1)
• Devise a contingency plan. Create a contingency plan for cancellation of live events. This could include filling a programme schedule and
addressing advertising commitments.
• Enhance content experience. Niche companies, in particular, should prioritize investing in quality content to drive viewership and
cement audience loyalty. Multidevice use in the home can also be used to offer differentiated experiences such as casting between
screens and mapping multiple user profiles on different devices.
• Partner with local authorities. Media companies including broadcasters and radio stations should partner with local government bodies
to disseminate important information and updates regarding COVID-9 in order to raise public awareness and share safety precautions.
Social media platforms can partner with local authorities and play an important role in reducing disinformation on the platform.
• Experiment with ad-supported service tiers. Many price-conscious consumers will be more inclined to experiment with free, ad-funded
OTT media services in their additional hours of free time at home. Ad-supported online video is one area that will likely benefit, as will
ad-supported music streaming and free-to-play mobile games. However, ads must be as nonintrusive and useful as possible to avoid
consumer backlash, and platform owners must be wary of declining overall ad budgets should economic woes continue.
Page 12 © 2020 Omdia
Information Classification: GeneralRecommendations for media companies (2)
• Studios should release new films online in communication with cinemas. Studios should release new movies on online video platforms,
because this can increase online sales for new films and reduce losses from the cancellation of theatrical releases and delays in film
production.
• Focus on social media and influencer marketing. Brands can shift their marketing budget to social media and video-sharing
destinations: these are a popular viewing choice for consumers when they are spending time at home. This is also a time when
consumers seek information online, and thus influencer marketing via short-form video may work well.
• Support flexible payments across multiple channels. There will be a rise in content and media consumption in the home as people stay
away from external entertainment sources. There will be a need for content outside of existing subscription models, and media firms
must provide easy, flexible payment options across multiple devices including desktops, laptops, smartphone apps, and AI assistants.
• Games developers should lower entry barriers to their online multiplayer games by introducing more free tiers or longer trial periods
than usual. People experiencing quarantine or self-isolation still need social contact, and online multiplayer games are a great way to
seek connection and support mental health while respecting curfews. Online games can be updated dynamically, so introducing
incentives for new (or returning) players could lead to bursts of acquisition and retention that ultimately benefit spend.
Page 13 © 2020 Omdia
Information Classification: GeneralRecommendations for media companies (3)
• Music-streaming services should take the opportunity to win new subscriptions. With so many workers and students facing lengthy
periods at home, the level of music streaming is set to increase as part of a “quarantine and binging“ effect. There is a potential
downside to this if only existing subscribers stream more, but this can be offset by ramping up marketing efforts to attract new
subscriptions and by increasing the visibility of discounted offers and free trials.
• Live-music companies need coordinated action. Cancellations of artist performances and festivals are inevitable going forward, but live
promoters must put on a united front and collaborate in terms of action plans. An “all-or-nothing“ approach to the viability of future
events will serve concertgoers best during the live-music downtime.
Page 14 © 2020 Omdia
Information Classification: GeneralRecommendations for technology vendors (1)
• Plan for an impact on the way companies approach large industry events in future. Over the past decade, several large companies such
as Nintendo, Oculus, Samsung, and Sony PlayStation have established “direct“ digital connection with consumers, and now other
companies are having to adopt this strategy, at least temporarily. It remains to be seen what permanent impact this could have on future
events: the relative success (or failure) of their direct approach will determine what companies’ event strategies look like for 2021 and
beyond.
• Diversify supply chains geographically to be shielded from adverse events. Many non-Chinese vendors are reliant on chipsets or
specific hardware that comes only from China or certain other markets. Likewise, Chinese vendors should consider strategically
expanding manufacturing premises, either outside the country or within China, to future-proof against adverse events that affect one
particular geography.
• Virtualization of hardware has been a niche in the vendor space; this is the time for wider experimentation. Vendors should future-
proof themselves against the shift to cloud by bringing virtualization expertise in-house. As hardware become more vulnerable to supply
reductions, cloud technology can step in to substitute, and even replace, hardware.
• Increase R&D around broadband quality of experience and smart devices. The world has suddenly woken up to the fact that it needs to
be prepared for global incidents such as the COVID-19 pandemic, leading to an increased focus and new investment in smart home and
digital media applications. Vendors should be ready to meet this new demand.
Page 15 © 2020 Omdia
Information Classification: GeneralRecommendations for technology vendors (2)
• Communications vendors should focus on providing platforms and services that connect, inform, and entertain people. These
platforms and services could include video calling and conferencing, emergency broadcasts, public service broadcasts, or content
sharing.
• To roll out services quickly in affected countries, communications vendors should harness the power of the cloud. COVID-19 is
spreading globally but unpredictably. Providing a cloud-based service will help communications vendors meet the needs of their telco
and service provider customers more quickly.
• Technology vendors and consumer tech players should open up their AI smarts to help the fight against COVID-19. The leading players
in this space (e.g., Google, Baidu, Alibaba, IBM, Cisco) have world-class AI technology and expertise, and they should make that available
to governments, scientists, and the medical community at no charge to help them fight COVID-19. This has the potential to help society
at large in a way that reflects well on those tech players that take this action.
• Show how your technology can help B2B/2C players through the crisis. Service providers of all kinds, and commerce players in
particular, need technology solutions and tools that can help their business and customers. Key solutions will include tools to better
manage strained logistics and deliveries, flexible payment solutions, enhanced security tools, and technology that enhances the
shopping experience (e.g., AR, voice commerce, chatbots, video).
Page 16 © 2020 Omdia
Information Classification: GeneralRecommendations for device makers
• Games console manufacturers should be prepared to give content and service freebies to new hardware owners. Because consoles
have shifted so heavily toward digital consumption over the past ten years, manufacturers can implement multiple forms of
compensation. Codes redeemable in online stores can be issued to counterbalance delays or other consumer frustrations, providing
people with free games or subscription periods for various services (PS Now, Xbox Game Pass, etc.).
• Smart home hub vendors should think of ways to make products more widely available during the crisis. Lockdowns, travel
restrictions, and general social distancing will mean people are spending increasing amounts of time at home and will need products to
entertain and support them. Smart speakers and displays can play an important role here, and vendors should implement schemes to
put these products into more homes, for example, by offering price cuts to people in the worst-affected areas.
• Promote financing options for smart home devices. Enable customers to purchase smart home devices over time. Target potential
customers with bundles and special offers, promoting specific use cases triggered by the pandemic (e.g., video calls with doctors).
Page 17 © 2020 Omdia
Information Classification: GeneralCOVID-19 impact summary Page 18 © 2020 Omdia
Impact summary (1)
Service segment Revenue impact What to expect Expected duration*
Mobile services Negative Loss of consumer confidence will affect 5G uptake 2y
Global mobile-roaming revenue will take a hit 1y
People staying at home will mean usage shifts more to Wi-Fi than to mobile 6m
Broadband Positive Increased home working and consumer videoconferencing 6m
Accelerated push toward smart health Continuous
Greater demand than ever for digital content 6m
Mobile apps Very positive Upsurge in app downloads and consumption 6m
Demand for entertainment, home working, delivery apps 6m
Mixed impact for ride-sharing and COVID-19 info apps 6m
Communications apps Positive Increased use of app-based video calling and conferencing 6m
Authorities need to provide reliable and timely communications 6m
Comms/social apps become vital links and boredom busters 6m
Social platforms Negative Increased use of social media to spread disinformation 1y
Advertisers reduce spending on social 2y
Social firms must give away precious ad space 6m
*Duration up to the period mentioned. This is an estimate based on whether the impact is purely driven by quarantines or lockdowns, continues for longer because of a post-pandemic recession, or simply accelerates an ongoing trend
Source: Omdia © 2020 Omdia
Page 19 © 2020 Omdia
Information Classification: GeneralImpact summary (2)
Service segment Revenue impact What to expect Expected duration*
TV content Neutral In-home TV viewing increases 6m
Demand for children’s, family, and news content grows 6m
Reduction in live event content (e.g., sports) 1y
Free-to-air TV Neutral Catalog finds favor as viewing increases 1y
Adding content makes sense 1y
Uncertainty over long-term TV advertising budgets 2y
Pay TV Negative Cord-shaving increases 2y
Bundling and discounts to take hold 2y
Broadband services get faster 2y
OTT video Very positive Increased consumption at home / increased uptake of OTT services 6m
SVOD subscriptions will grow 6m
AVOD services can capitalize on increased viewership 6m
Cinema Very negative Cinemas shutting down as people go into lockdown 1y
Distributors delay film releases or move to digital 1y
Pent-up demand for cinema may lead to strong reopening 1y
*Duration up to the period mentioned. This is an estimate based on whether the impact is purely driven by quarantines or lockdowns, continues for longer because of a post-pandemic recession, or simply accelerates an ongoing trend
Source: Omdia © 2020 Omdia
Page 20 © 2020 Omdia
Information Classification: GeneralImpact summary (3)
Service segment Revenue impact What to expect Expected duration*
Advertising Very negative Brands reduce overall ad budgets 2y
Canceled events and travel restrictions impact ad revenues 1y
Digital share of market grows as consumers spend more time at home 6m
Digital commerce Very positive Online shopping and payments will surge 6m
Not all merchants will benefit, and logistics and fulfilment will be strained 6m
There will be a rise in in-person payments via contactless cards and mobile apps 2y
AI Very positive AI is playing a vital role in the detect-and-contain medical response to COVID-19 2y
AI will support and entertain people at home 6m
AI will be used to safeguard consumers from unscrupulous activity Continuous
Smart home Positive Growing focus on home improvement and hygiene Continuous
Home healthcare will intensify Continuous
Voice control will help users to avoid touching surfaces and objects Continuous
AR/VR Positive Sharp rise in investment into VR enterprise applications 6m
AR glasses makers explore thermal imaging for disease detection 1y
VR headset adoption will likely be damped by production issues 6m
*Duration up to the period mentioned. This is an estimate based on whether the impact is purely driven by quarantines or lockdowns, continues for longer because of a post-pandemic recession, or simply accelerates an ongoing trend
Source: Omdia © 2020 Omdia
Page 21 © 2020 Omdia
Information Classification: GeneralImpact summary (4)
Service segment Revenue impact What to expect Expected duration*
Music Very negative Inevitable increase in streaming consumption 6m
Music events of all sizes will be canceled 1y
Artists, performers, and music companies face earnings losses 1y
Games Neutral Mobile games see record active users 6m
PC games experience temporary uplift in revenue and activity 6m
New console launches will not meet demand 2y
eSports Negative Cancellation of major physical esports championship events 1y
Large games companies’ 2020 esports strategies impacted 1y
Media rights and streaming advertising largely unaffected Continuous
*Duration up to the period mentioned. This is an estimate based on whether the impact is purely driven by quarantines or lockdowns, continues for longer because of a post-pandemic recession, or simply accelerates an ongoing trend
Source: Omdia © 2020 Omdia
Page 22 © 2020 Omdia
Information Classification: GeneralThe overall impact across consumer digital
services will be driven entirely by e-
commerce offsetting physical retail
• An expected precipitous decline in physical retail will result in a
boom in e-commerce. Amazon US has already announced plans
to hire an additional 100,000 workers and has increased hourly
wages, while supermarkets workers are being redeployed to
support digital sales in warehouses, packaging, and shipping.
• E-commerce will grow around 5% overall as more purchases are
offset by the lower value of the goods being bought. This takes no
account of the reduction in physical retail.
• Other consumer digital services will show flat overall growth as
advertising and mobile services decline against broadband and
entertainment services.
Note: this chart is just an illustration of the likely outcome. Omdia will provide a detailed quantitative analysis in a subsequent report.
*Games includes esports
**Direct consumer spend on nongaming apps
Source: Omdia © 2020 Omdia
Page 23 © 2020 Omdia
Information Classification: GeneralCOVID-19 global pandemic update Page 24 © 2020 Omdia
COVID-19: What is it?
• As of March 24, 2020 there have been around 420,000 confirmed
cases of COVID-19 (often referred to as “coronavirus“) officially
registered across 195 countries, of which 297,000 are still active,
and around 19,000 deaths. On March 11, WHO declared the virus
a pandemic, which means it is spreading globally in an
uncontrolled manner.
• The highest numbers of registered cases are in China, Italy, the
US, Spain, Germany, Iran, France, Switzerland, South Korea, and
the UK. However, the accuracy of the figures is highly dependent
on local conditions including the availability of testing kits and the
stringency of testing criteria.
• This is a genuinely novel situation, both as a global health crisis
and as a macroeconomic shock. It is therefore difficult to
accurately predict any of the impacts, even relatively short-term
ones. However, there is a range of factors that are worth
considering to determine the likely range of impacts. Source: Worldometers.info © 2020 Omdia
Page 25 © 2020 Omdia
Information Classification: GeneralMost countries are not capturing
the full extent of the pandemic yet
• With the exception of in mainland China, Hong Kong, Japan,
Korea, Singapore, and Taiwan there is a significantly lower level of
testing, contact tracing, and containment practices than required
to achieve visibility of the entire outbreak. This means that most
governments do not yet know the full extent or likely progression
of the outbreak.
• Crucially, China and Korea found that around 60–80% of COVID-
19 transmissions occur in the asymptomatic phase (before
symptoms appear), which lasts for five to seven days. This means
that focusing containment and treatment on symptomatic cases
does not limit further transmission and that the extent of
transmission is not visible for one to two weeks. Without
containment measures, this lag in visibility of actual cases means
cases will continue to grow exponentially until the pandemic has
run its course or containment measures are put in place.
Source: Center for Systems Science and Engineering, Johns Hopkins University (2020) Coronavirus COVID-19 Global Cases.
Available at www.worldometers.info/coronavirus/; https://github.com/CSSEGISandData/COVID-19;
https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca
Page 26 © 2020 Omdia
Information Classification: GeneralEconomic impact will be felt in several
phases, culminating in a recession
The likely impacts of the COVID-19 pandemic on the global economy
will come in three phases:
• initial supply and demand shock: supply restriction because of a
lack of labor and closed workplaces; demand shock due to
consumer fear
• containment: government-mandated restrictions that mostly
further reduce demand by restricting travel and closing
businesses and public spaces; this will be directly moderated by
government decisions and responses
• recessionary pressures: further demand reduction due to loss of
jobs, income, and spending power. Governments and central
banks will try to offset some of the worst recessionary impacts.
Importantly, how governments mitigate lost personal income and
pressure on companies to make redundancies will have a critical
impact on how this plays out in the next months and how long
the slowdown lasts.
Page 27 © 2020 Omdia
Information Classification: GeneralGovernmental responses Quarantine and encouraged social distancing
• Governments act early to reduce the spread through mandatory
quarantines and encouraged social distancing for the entire
Limited or late containment population.
• Governments act late or do not act at all to reduce person-to- • Businesses are closed; working from home is recommended or
person interaction in-country. required. Ideally, transmission is managed to match healthcare
capacity.
• The spread of COVID-19 is exponential, resulting in widespread
illness peaking in two to three months and leading to 60–80% of • In moderate cases, disease spread is limited to linear rather than
population becoming infected over the coming year. exponential growth. In strict cases, there is localized, temporary
eradication.
• The chance of healthcare systems collapsing peaks. There is
widespread self-isolation as people make their own decisions to • The economic impact is likely to be a strong reduction in local
avoid transmission. spending because of closed businesses and will be sustained as
measures last for many months.
• The economic impact is likely to be sharp and potentially
catastrophic, because people are no longer able to work because • Resolution is mostly achieved by herd immunity through
of illness. vaccination with isolated instances of local eradication and long-
term travel restrictions until vaccinations are available.
• Resolution is due to herd immunity through infection coupled by
vaccination in 12–18 months.
Page 28 © 2020 Omdia
Information Classification: GeneralPotential consequences of government response
Limited/late containment Early/full lockdown
Brazil Germany Greece China Hong Kong
Iran France Morocco Denmark Israel
Italy Japan Portugal Korea Singapore
UK Switzerland Taiwan
US Spain
Initial economic schock
Mortality
Duration
Page 29 © 2020 Omdia
Information Classification: GeneralLikely resolution of the outbreak
and recessionary pressures
• The initial reaction from the market has been a rapid sell-off
across all global stock markets. Containment measures in China
and Europe have triggered huge dips in all markets.
• The endpoint for both realistic scenarios is herd immunization
through vaccination, which experts predict will take 12–18
months. Before that, any location that is virus free will likely
impose long-term travel restrictions, and any countries with
containment measures will likely have to keep them for
approximately the same duration to manage the spread.
• Agriculture and most digital industries will be least impacted.
Pharmaceutical and some heavy industry will grow as they are
mobilized to deal with the direct impact. Gaming, pay TV, and
online video will likely grow as people are kept isolated. Retail,
travel, automotive, and energy industries will be badly impacted
by the slowdown in consumption. Source: Omdia © 2020 Omdia
Page 30 © 2020 Omdia
Information Classification: GeneralConsumer demand impact: Mobile and broadband Page 31 © 2020 Omdia
Mobile services: What to expect
Loss of consumer • Amid forecasts of recession, consumers will show reluctance to
spend more on telco services (e.g., 5G).
confidence • People staying at home will see usage shift more to Wi-Fi than to
will affect 5G uptake mobile. In some cases prepaid users may top up in smaller amounts.
Delays in 5G moving • The deployment/acceleration of 5G networks will slow in some
cases, restricting 5G coverage expansion beyond hotspots.
beyond early • Unable to get a cheaper handset (because of supply issues),
adopters consumers could delay upgrading to 5G.
Global mobile- • Canceled or delayed travel will adversely affect roaming traffic and
revenue.
roaming revenue will • This is not an indicator for the EU, where universal roam-like-home
take a hit tariff policies exist.
Page 32 © 2020 Omdia
Information Classification: GeneralMobile services: How to respond
Response Company types
Do not overhype 5G’s network reach. Market transparent, clear, coverage maps. Telco
Consider short-term handset subsidies to stimulate 5G demand. Telco
To dissuade prepaid users from downgrading in areas where they are staying at home longer, telcos could Telco
consider short-term promotions (e.g., bonus data offers) as long as the network is not overburdened.
If the mobile network is overburdened, telcos should urge alternatives such as fixed line for voice or Telco
promotional off-peak data usage.
Focus on antichurn management strategies. Telco
Stimulate roaming spend with innovative tariffs when travel improves. Telco
Keep 5G premiums moderate. Telco
Page 33 © 2020 Omdia
Information Classification: GeneralMobile services: Company impact and responses so far
Company name Company type Location Response/impact
China Mobile Telco China Network acceleration plans for 5G in 2020 (beyond phase 2) could be delayed.
Postponed tenders for six major 5G projects (e.g., healthcare, Industrial Internet of
Chinese government Government China
Things)
Telefónica Telco Spain Free 30GB monthly for two months for mobile customers.
On March 15, 2020, Spanish telcos announced that mobile voice and data traffic had
Movistar, Orange, Vodafone, increased 25% and 50% respectively since the COVID-19 outbreak began, urging
Telco Spain
MásMóvil, and Euskaltel prioritization of network usage. Recommendations include using fixed lines rather than
mobile for calls.
The CEO flagged possible network equipment delays, noting Chinese component
Deutsche Telekom Telco Germany
production delays.
A $500m increase in 2020 capex including for 5G to “help support the economy during
Verizon Telco US
this period of disruption.“
Federal Communications FCC issued T-Mobile with spectrum at 600MHz for 60 days to assist with emergency
Regulator US
Commission services, remote working, and tele-health. It also urges waiving long-distance fees.
Page 34 © 2020 Omdia
Information Classification: GeneralBroadband services: What to expect
Increased home • Videoconferencing becomes the default option for business.
working and • Education establishments move to remote classroom options.
consumer • Increased pressure on governments to ensure high-quality
videoconferencing broadband for all.
• Governments get serious about remote healthcare for all.
Accelerated push • Increased pressure on governments to ensure high-quality
broadband for all.
toward smart health
• Increased focus on connected home to enable smart health.
Greater demand • Home digital content receives a real boost.
than ever for digital • An increase in interest in content bundles to secure the best deal.
• Increased focus on application prioritization to ensure the QoE.
content
Page 35 © 2020 Omdia
Information Classification: GeneralBroadband services: How to respond
Response Company types
Work with government organizations to accelerate “high-speed broadband for all“ initiatives. Broadband operators
Market initiatives such as increased speed, smart Wi-Fi, and application prioritization that ensure Broadband operators
QoE as a differentiator for applications such as videoconferencing.
Increase speed or lift usage restrictions on a short-term basis. Broadband operators
Innovate around service resilience and QoS insurances measures for key applications such as smart Broadband operators, device vendors
health.
Innovate around service and device bundles to help facilitate smart health. Broadband operators, device vendors
Ramp up broadband and media bundling and offer new special short-term deals including free Broadband operators, OTT media platforms
access to specific content for certain periods.
Page 36 © 2020 Omdia
Information Classification: GeneralBroadband services: Company impact and responses so far
Company name Company type Location Response/impact
UK government Government organization UK An investment of £5bn in faster broadband across the country.
US government Government organization US Under renewed pressure to ensure broadband for all for remote education.
ACT Fibernet Broadband service provider Bangalore Upgrading its broadband speeds to as high as 300Mbps and
providing an unlimited fair-usage policy (FUP) until March 31.
Telefónica Service provider Spain Will make every effort to ensure that the telecommunications network works at
full capacity, in a reliable, stable, and secure way.
Provides its entertainment offer, especially children’s and sports content, free of
charge, accessible through the Movistar+ Lite application where customers and
noncustomers can enjoy a month free.
Telecom Italia Service provider Italy Will provide free gigabit service, unlimited voice traffic, access to TIMvision, and
other initiatives aimed at both consumer and business customers for a month in
affected areas.
AT&T Service provider US Is suspending data caps for broadband internet customers.
Page 37 © 2020 Omdia
Information Classification: GeneralConsumer demand impact: Mobile apps, comms, and social Page 38 © 2020 Omdia
Mobile apps: What to expect
• Demand for apps will surge with growing downtime at home,
Upsurge in app particularly among schoolchildren, college students, and workers
downloads and unable to do their jobs remotely.
consumption • Downloads, and time and money spent on apps, will grow.
Demand for • Rising demand for entertainment apps, especially for children and
entertainment, home young people (e.g., games, play-and-learn apps, etc.).
working, delivery • Also for home working, remote learning, school comms, apps.
apps • And for food-delivery apps, as people shun physical outlets.
Mixed impact for • In early-impact scenarios, there will be more ride sharing as people
shun public transport but none in lockdown scenarios.
ride-sharing and • Demand for virus-impact info, including mapping, will surge but so
COVID-19 info apps will the clampdown on unofficial information sources.
Page 39 © 2020 Omdia
Information Classification: GeneralMobile apps: How to respond
Response Company types
Focus app marketing efforts on virus-lockdown areas to maximize the benefits of the surge in App publishers and marketers (incl. OTT service providers
downloads and in-app activity. and platforms, and media companies)
Speed up rollout of new in-app features, content, and levels (e.g., games) to keep users App publishers and marketers (incl. OTT service providers
engaged during this period of greater consumption. and platforms and media companies)
Beef up in-app content/services geared at children and young people. Media companies, OTT service providers and platforms
Publish mobile apps to provide people with official virus-impact info and counter Governments, health authorities
disinformation/panic-inducing info from unofficial sources.
Monitor both official and unofficial COVID-19 info apps, and ban any that are misinforming or App ecosystem owners
masquerading underhand activities.
Prepare for, at first, a surge in demand as people look to avoid public transport, followed by Ride-sharing app publishers
plummeting demand in areas that have been locked down.
Use downtime from canceled developer events to not only enrich app offering but also carry App developers and publishers
out software debugging and other outstanding app-housekeeping tasks.
Page 40 © 2020 Omdia
Information Classification: GeneralMobile apps: Company impact and responses so far
Company name Company type Location Response/impact
Classting, Google, Remote-teaching/ Italy, South Korea There has been a surge in demand for apps enabling schools to remotely teach
Edmodo, eNotifier, school-notifications housebound pupils and communicate with parents in locked-down areas of Italy and
IMS School, Kids app publishers South Korea. DAUs rose sharply for Google Classroom, Edmodo, and WeSchool in
Note, WeSchool, Italy, and new installs shot up for Classting, eNotifier, Kids Note, IMS School, and
Zoom Zoom in South Korea.
BJ’s, Costco, Food/grocery delivery Italy, South Korea, There has been a surge in demand for food/grocery delivery apps in Italy, South
Esselunga, eMeals, app publishers US Korea, and the US. DAUs rose sharply for Deliveroo, Esselunga Online, and Just East in
Deliveroo, Insta- Italy and for Post Kmall and Public Shopping in South Korea. In the US, eMeals and
Cart, Post Kmall, InstaCart experienced a big jump in orders, and BJs Wholesale and Costco saw new
Public Shopping installs shoot up.
Dida, DiDi, Hello, Ride-sharing app China, US In the US, Lyft recorded its highest revenue and volume of rides ever as more people
Lyft publishers avoided public transport, but in locked-down China, Dida, DiDi, and Hello all
experienced big dips in app sessions.
Google App ecosystem/OTT Iran Banned virus-tracking app AC19, published by the Iranian government and accused
service provider of spying on citizens, from Play Store.
Page 41 © 2020 Omdia
Information Classification: GeneralCommunications apps and services: What to expect
Increased use of • Quarantine and self-isolation will reduce in-person meetings.
app-based video • Consumers and employees use video as a substitute, enabling more
calling and personal and social interactions as appropriate.
conferencing • Higher use of video will increase traffic across telco networks.
Authorities need to • Governments, health authorities, and enterprises will need to
provide reliable, communicate effectively, especially under quarantine.
timely • They will use multiple channels – SMS, comms apps, social –
depending on the severity of the situation and required reach.
communications
Comms/social apps • Confined people will rely on their comms apps to maintain links to
become vital comms the outside world and to entertain themselves.
links and boredom • There will be an increase in app-based content generation, sharing,
consumption, and commerce.
busters
Page 42 © 2020 Omdia
Information Classification: GeneralCommunications apps and services: How to respond
Response Company types
Increase data caps for consumers on metered plans, for an affordable fee. Telcos
Increase network capacity to cover expected increased demand for voice, video, and Telcos
messaging communications.
Ensure emergency broadcast capabilities are robust and scalable. Telcos
Test new content-based or commerce services. Communications app providers
Accelerate the launch of new content-based or commerce services as practicable. Communications app providers
Scale up capacity for messaging, voice calling/conferencing, and video calling/conferencing to Communications app providers
cover expected increased consumer use.
Be prepared for increased demand for platforms and services that enable video Technology vendors
calling/conferencing.
Be prepared for increased demand for platforms and services that enable emergency Technology vendors
broadcasts or public service announcements.
Page 43 © 2020 Omdia
Information Classification: GeneralCommunications apps and services: Company impact and responses
so far
Company name Company type Location Response/impact
Telefónica Telco Europe, South and Has taken steps to ensure its network operates reliably and at full capacity across all
Central America markets; increased data cap for its Fusion and Movistar mobile customers by 30GB per
month for two months.
Vodafone Telco Spain Gives its professional, SME, and freelance customers unlimited data until end-March 2020.
Bharti Airtel, BSNL, Telco India India’s Ministry of Health directed Indian telcos to replace their ringtones with a 30-second
Reliance Jio, audio clip with information about COVID-19; it also told telcos that they might be asked to
Vodafone Idea send SMS alerts that provide a list of “dos and don’ts.“
SKT, Singtel, AIS Telco Asia-Pacific The CEOs of SKT, Singtel, and AIS signed a contract agreeing an esports joint venture during
a videoconferencing call, held as an alternative to an in-person meeting because of COVID-
19.
NTT DoCoMo Telco Asia-Pacific NTT DoCoMo instructed its employees to use videoconferencing in place of face-to-face
meetings.
Google Internet company Global Google has made premium features of its Hangouts Meet videoconferencing free until July
1, 2020.
IP Telecom Vendor Europe IP Telecom waived installation and usage fees for its hosted remote working platform.
Page 44 © 2020 Omdia
Information Classification: GeneralSocial platforms: What to expect
Increased use of • Increased numbers of “fake news“ posts must be found and
social media to removed by social platforms.
spread • Potential for bad PR if social platforms are blamed for allowing
disinformation to proliferate.
disinformation
• Advertisers will not want to risk brand reputation by running
Advertisers reduce adverts alongside content about coronavirus.
spending on social • Advertisers in coronavirus-affected verticals (sports, travel, film,
etc.) will reduce ad budgets to cope with the drop in income.
• Social firms are effectively giving away ad space against the biggest
Social firms must current keyword to health authorities such as the WHO, CDC, and
give away precious the NHS in order to protect public health.
ad space • Social firms are having to remove more ads from profiteers.
Page 45 © 2020 Omdia
Information Classification: GeneralSocial platforms: How to respond
Response Company types
Prevent spread of disinformation by fact-checking content and removing misleading content. Social platform providers
Remove coronavirus-related advertising from scammers and profiteers. Social platform providers
Liaise with social platforms to ensure adverts are not displayed next to coronavirus content. Advertisers
Fill the vacuum left by the removal of misleading content with factual content. TV broadcasters/content owners
Page 46 © 2020 Omdia
Information Classification: GeneralSocial platforms: Company impact and responses so far
Company name Company type Location Response/impact
Facebook Social/messaging US Facebook has canceled participation in a number of conferences and moved its own F8
platform provider Developer Conference online. It has also closed an office in Seattle and banned visitors
from its offices.
When users search for “coronavirus,” information from WHO or a local health authority is
shown first.
It has also banned ads for face masks as well as any adverts claiming to sell a cure or
treatment for coronavirus and has pledged that it will remove disinformation about the
novel coronavirus from Facebook and Instagram.
Pinterest Social platform US Pinterest has redirected any searches for coronavirus to officially sanctioned advice from
provider WHO.
Twitter Social platform US Twitter has banned all outside visitors from its San Francisco headquarters.
provider It has also banned advertisers using the COVID-19 outbreak to target inappropriate ads
and directs users searching for “coronavirus“ to local health authority websites and Twitter
feeds.
TikTok Social platform China TikTok has said that it has been working to promote factual content. WHO has joined
provider TikTok to aid this effort.
Page 47 © 2020 Omdia
Information Classification: GeneralConsumer demand impact: TV, OTT video, cinema, and TV devices Page 48 © 2020 Omdia
TV viewing and content availability: What to expect
• TV viewing increases as people spend more time at home because
In-home TV viewing of the implementation of measures to contain the spread of the
virus.
increases • Differences in viewing preferences lead to multiple devices and
screens being used concurrently in the home.
Demand for • Demand for information, news, and talk shows increase as
children’s, family, workflow shifts to remote, decentralized work environments.
and news content • Demand for children’s content grows because of school closures.
• Families at home together spike demand for family content.
grows
• Reduction in live event content because of cancellation of sports.
Reduction in live • Consumer viewing patterns will shift from live events and reality-TV
event content such programming to sitcoms and series.
as sports • Major impact on revenue for rights holders of live events.
Page 49 © 2020 Omdia
Information Classification: GeneralFTA TV and TV advertising: What to expect
• In-home TV viewing of free content will increase as households
Catalog finds favor experience financial hardship.
as viewing increases • Free-to-air (FTA) TV broadcasters experience greater adoption of
their catch-up TV services as users seek out catalog content.
• Quality of content increases across the viewing day to capture
Adding content audiences at differing times (e.g., affordable catalog content that
has potential to act as a good cost-saving measure).
makes sense • An addition of niche content in place of infomercials to increase
viewership and test new audiences.
• TV advertising spend carries a lot of inertia; a spike in viewership
Uncertainty over will not convert into an immediate revenue upside.
long-term TV • Canceled upfront events and negative long-term economic outlook
advertising budgets will impact renewals and pipeline for new campaigns.
Page 50 © 2020 Omdia
Information Classification: GeneralPay TV: What to expect
• Cord-shaving increases as users cancel costly channels and add-ons
in favor of less expensive packages.
Cord-shaving • Reduction in the price of the most expensive pay-TV packages.
increases • Employee quarantine and consumer reluctance to let installers into
their homes create barriers for new subscription additions.
• Bundling will help to get new products in front of potential
Bundling and customers; new reduced price bundles (e.g., hybrid FTTH and IPTV
discounts to take service at a reduced price in Italy) may find favor with price-
hold sensitive subscribers.
• Increase in promotions (e.g., free month from Telefónica in Spain).
• Telco operators will focus on infrastructure upgrade to meet the
Broadband services increase in demand for broadband services but might face setbacks
with technicians not able to make house calls.
get faster • Speed upgrades will see an uptick as more users at home require
more bandwidth and unlimited data usage.
Page 51 © 2020 Omdia
Information Classification: GeneralMobile TV: What to expect
• Mobile TV viewing in-home increases because the primary TV set
will be used more by family members at home.
Mobile device use
• Consumers conserving household income will marginally increase
will grow in value spend on mobile devices (i.e., low-end/pre-used handset and tablet
sales for children at home).
• Conversely, people who primarily turned to mobile video in an out-
Loss of out-of-home of-home environment will no longer be interested in mobile video
consumption consumption.
• Growth in prepaid mobile will slow as people stay home.
Prepaid will slow as • Demand for mobile TV breeds more competitive contract fares.
contracts grow • Demand for a reliable mobile connection to better the viewing
experience drives 5G growth.
Page 52 © 2020 Omdia
Information Classification: GeneralOTT video: What to expect (1)
Increased
• People sign up temporarily to new services.
consumption at • Increased demand on home broadband bandwidth to
home/increased accommodate OTT video consumption.
uptake of OTT • People try new services and business models.
services
Growing demand for • Increase in uptake of both generalist and specialist services.
• Increased levels of viewership for children’s and family content.
children’s and family
• Increased demand for content might negatively affect smaller
content services unable to offer wide library of content.
• Live contents to be replaced with other shows or game replays.
Lack of live sports • Sports-focused OTTs are at risk for loss of revenue.
content; disrupted • Once production disruption starts affecting the new content
production release schedule, SVOD services will find subscription acquisition
and retention more challenging.
Page 53 © 2020 Omdia
Information Classification: GeneralOTT video: What to expect (2)
• Netflix, Disney+, DAZN, and others will all benefit from people’s
SVOD subscriptions staying at home; Amazon Prime’s offer of fast delivery and SVOD
makes for a particularly attractive consumer proposition.
will grow • As consumers increasingly become more frugal, pay-TV
subscriptions will transition to online video services.
• Opportunity for telco operators to offer an FTTH, mobile, and
New product and SVOD bundle package.
services • D2C services, such as AT&T HBO Max or Disney+ International,
opportunities may accelerate their 2020 launch schedules.
• AVOD players with large content libraries (e.g., Tubi.tv and Pluto.tv)
AVOD services can experience a rise in viewing.
capitalize on • AVOD can attract brands increasing digital spend (e.g., food
increased viewership delivery) and unmet demand from brands blocking inventory
associated with COVID-19 content.
Page 54 © 2020 Omdia
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