Please ensure Javascript is enabled for purposes of website accessibility

Right on Schedule, Here's the Streaming Boom

By Stephen Lovely - Apr 1, 2020 at 8:52AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Hey, shouldn't you be working?

The COVID-19 pandemic has been nothing short of devastating. More than 33,000 people have died of COVID-19-related causes as of this writing, and that number is only increasing. Self-isolation, quarantines, and government-mandated shutdowns are keeping people indoors, triggering a massive wave of job losses and disastrous consequences for a wide range of businesses, including restaurants, bars, movie theaters, and brick-and-mortar retailers. The market has reacted accordingly.

In all of this, though, there might be a silver lining for streaming services such as Netflix (NFLX -1.18%) and Disney-owned (DIS -0.49%) Disney+. Experts had predicted that streaming demand could rise under these stay-at-home conditions, and now, it appears the promised industry boom has arrived.

A couple watches TV on the couch

Image source: Getty Images.

Predictive power

Earlier this month, consulting firm Nielsen predicted that TV consumption would increase significantly during this period of self-isolation, unemployment, and working at home (or pretending to work, anyway). The predicted increase covered both legacy pay-TV services and modern streaming services (which, in turn, include both on-demand services such as Netflix and live-TV streaming services such as Dish's Sling TV).

Streaming accounts for about a fifth of all TV viewing, so Nielsen's prediction seemed like great news for Netflix and its peers. But Nielsen did note that previous periods of isolation triggered by disaster lifted TV viewing hours in part because isolated individuals and families sought out news related to the situation. Netflix and Disney+ do not, of course, offer news -- giving us at least one reason to wonder how much of an impact increased TV viewing would have on the streaming giants.

The stay-at-home streaming boom

We need wonder no more: Netflix and its streaming tech peers seem to be logging major streaming hours in the midst of the pandemic.

A survey from Hub Entertainment appears to confirm Nielsen's prediction of more TV news and entertainment viewing. Hub asked respondents to report if they were doing more or less of certain activities during the pandemic. Predictably, "going to the movies" fared rather poorly: Only about a fifth of respondents said they were doing more of that. But huge portions of respondents self-reported increased amounts of streaming on subscription services and renting pay-per-view movies and shows. Broadcast TV, cable TV, and video gaming also enjoyed big booms.

Activity Respondents who say they're doing "a lot more"
or "a little more" now vs. a month ago
Watching Disney+ 68%
Renting pay-per-view content 66%
Watching Hulu 66%
Watching Netflix 66%
Playing video games 65%
Watching broadcast TV 58%
Watching cable TV 57%
Watching Amazon Prime video 56%
Going to the movies 18%


These survey findings are corroborated by other evidence. Netflix recently set an all-time high in data use on AT&T networks, per an AT&T announcement. In Europe, streaming services have cut streaming quality in order to better respect the limits of broadband infrastructure; with communications networks burdened by the crisis, governments had to rely on quality cuts from services such as Netflix and Alphabet's YouTube to keep streaming habits from excessively slowing vital communications.

In other words, the stay-at-home streaming boom is very, very real.

A consolation prize

A stay-at-home streaming boom doesn't mean companies such as Netflix are about to make a fortune in a flood, of course. But it's a nice consolation prize, particularly for media giants such as Disney, which have been hit hard by the pandemic's economic realities. Disney's shuttered parks and unlucky theatrical-release films helped trigger a major slide in Disney's stock price -- the stock was down 40% at its lowest COVID-era point, though it has rallied slightly as of this writing. Disney+ is a relative bright spot amid a lot of headaches for Mickey's gang.

The streaming boom may also help companies that are planning streaming debuts, such as AT&T, which will launch HBO Max (reportedly on time) in May. Unlike a grand retail opening or a big movie release, such debuts should be able to go forward relatively successfully.

An uptick in streaming by stay-at-home Americans and others around the world won't undo all of the damage COVID-19 has done, but it's a silver lining that streaming executives had to have been looking forward to in recent weeks. It's real, it's here, and it's something to hold onto in a difficult moment for all kinds of businesses.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$177.49 (-1.18%) $-2.11
The Walt Disney Company Stock Quote
The Walt Disney Company
$95.45 (-0.49%) $0.47
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,250.80 (0.47%) $10.65, Inc. Stock Quote, Inc.
$109.38 (1.84%) $1.98
AT&T Inc. Stock Quote
AT&T Inc.
$20.64 (0.17%) $0.04
DISH Network Corporation Stock Quote
DISH Network Corporation
$17.64 (-2.67%) $0.48
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,259.43 (0.35%) $8.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.