Covid-19 Impact: Streaming Services Gain Foothold in Entertainment for Britons

  • Aug 05, 2020 BST
  • Team Kalkine
Covid-19 Impact: Streaming Services Gain Foothold in Entertainment for Britons


  • Britons, in general, spent nearly half of their day in watching content online and television during the lockdown
  • The online content providers and OTT platforms have strongly emerged as a parallel industry due to the outbreak of the Covid-19
  • The conventional broadcasters have been severely impacted during the unprecedented crisis

Entertainment is an essential part of the contemporary world. It allows us to relax and stop thinking about our troubles during tough times. A dose of entertainment synergises mind and body to cope better with our daily chores. Moreover, entertainment preserves and promotes culture. It provides us with a reflection of things prevalent in the society as well, and most importantly, it is vital for people of all age groups.

If we talk about the economy, then even entertainment has its prominence, the entertainment sector is the major contributor to UK’s revenue, a lot of tax is collected from the industry. In addition, the sector provides a lot of employment opportunities for various skill sets.

The entertainment industry has been hit hard due to the unprecedented crisis induced by the coronavirus pandemic as the entertainment zones usually have mass gatherings. Due to the novel coronavirus led social distancing norms, hygiene measures are still a challenge for any kind of gatherings, leading the businesses operating in this sector to a sudden and screeching halt.

Due to the exceptional situation, people were encouraged to stay away from public squares and mass gatherings. Moreover, they were asked to work from home. Therefore, Britons had switched to home entertainment alternatives. According to media watchdog, Ofcom, during the lockdown induced by the unprecedented crisis, Britons, in general, spent nearly half of their day in watching content online and television. 

The consumption of content went up by nearly 30 per cent in April 2020; in contrast to the same month previous year and stood at 45 hours per week as Britons followed official health advisory to stay at home during the coronavirus induced lockdown. This implies that an average Briton spent around six hours each day in consuming content from television or online streaming web applications and OTT (over-the-top) platforms.

As home entertainment was the only feasible option for the Britons to relieve their stress and anxiety levels, the spending on the subscription of the streaming services such as Netflix, Disney+ and Amazon Prime Video has nearly doubled and most interestingly, the majority of the subscribers were between 16-to 34 years of age.

The online content providers and OTT platforms emerge as a parallel industry

The recent catastrophe caused by the pandemic has led to a seismic shift in the way content is consumed today. With home entertainment as the only viable option, the demand for online content has increased drastically in the matured space. There are many content providers in the UK such as Netflix, Amazon Prime video, Disney+, ITV Hub, iPlayer, Apple TV, BritBox, and many others.

The unprecedented crisis has been favourable for these content providers. One of the advantages to these online streaming providers is that they operate in the Business to Consumer segment, which helps in connecting to a larger audience. They have the flexibility to access the content at the comfort of their home and as per their time schedule. Secondly, most of the OTT platforms are not regulated, which means that any kind of curated content could be broadcast without seeking many regulatory approvals, which is not the case with the conventional cinema.

Recently, Artemis Fowl, an American science-fiction movie, was released on Disney in the UK. Similarly, Universal's Trolls: World Tour made nearly €91.9 million in its first three weeks as it released on digital rental platforms last month. According to some media reports, this figure was higher than that of showcasing movies for five months through conventional platforms.

Also read: UK Film Industry Getting Ready for The Lockdown Easing

The plight of conventional broadcasters

Meanwhile, the conventional broadcasters are struggling for viewership due to accelerated shift to consumption of online content. Notably, the conventional broadcasters have tried to venture into streaming services; however, they are far behind their competition in the parallel industry.

There are quite a few challenges faced by conventional broadcasters. Unlike the OTT platforms, the conventional broadcasters are supposed to develop content as per the guidance from the regulatory authorities and must seek certain permissions from the legal perspective before releasing or showcasing the content.

Most of the content that is showcased by broadcasters is not much popular with the Britons. For instance, every time you tune a news channel, the content is based on the devastation caused by the coronavirus pandemic. People want something new, positive, and refreshing.

Most of the conventional broadcasters are popular for streaming sports-related content. But the sad part is that major international sports events have been rescheduled due to the catastrophe caused by the coronavirus pandemic. For instance, Japan, the host country of Tokyo Olympics 2020, has postponed the mega event to next year (2021) in the wake of the novel coronavirus. 

To make things worse, the conventional broadcasters and media groups are devastated by drying up of advertising revenues due to the unprecedented crisis. Recently, the United States based media group, Buzzfeed decided to end operations in the United Kingdom.

Cineworld Group Plc (LON: CINE) had to secure additional liquidity of USD 110 million through its revolving credit facility. In addition, the cinema chain is likely to apply for an additional USD 45 million under CBILS loan scheme launched by the British government. In the pre-pandemic era, the cinema chain, Cineworld Group Plc attained a CAGR (compounded annual growth rate) of 76.27 per cent as its total revenue grew from USD 797.80 million in FY16 to USD 4,369.7 million in FY19.

Also read: Corona Impact- Buzzfeed To Shut Local Media Coverage in The United Kingdom

The business model of the conventional media has been jeopardised due to the pandemic, while the revenue streams dried up, the businesses were still required to meet the obligations such as wages and rents when there was no clarity on media houses being a part of lockdown easing plans devised by the British government.

In the last two decades, the media houses and conventional broadcasters such as ITV are switching to online platforms. As the industry is transitioning to digital platforms, revenue from advertising remains a key growth driver. Meanwhile, the OTT platforms are riding high and are expected to showcase new releases in the near term and hence the subscriber base of online content and OTT platform is likely to increase going further as well.


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