As the coronavirus pandemic continues to bite into everyday lives, consumption habits have been massively upended by closures and social distancing measures. We’ve previously covered how the telecoms world is faring amidst the COVID-19 pandemic, but how are the many subscription services responding in this time of crisis, and what lessons are there in these cases?
As millions remain cloistered away worldwide while the COVID-19 pandemic continues to wreak havoc on every corner of daily life, online and delivery focused subscription businesses have picked up the slack where traditional service providers have been hindered.
Faced by captive new audiences trapped at home with disruptions to their regular consumption habits, coronavirus has brought out the generous side of many companies, who have rushed to fill the gaps in potential new customers’ lives.
The use of Microsoft Teams continues to grow, having more than doubled
since the start of the year, with the UK’s NHS workers being granted free access
to the service, on top of a number of other freebies for frontline workers.
But it’s at the offices of Zoom where the champagne corks will no doubt be flying, as the user numbers of the relatively marginal video conferencing software leapt from 10 million at the end of last year to 200 million, aided in no small part by their decision to provide it to schools in the US for free
. Even British Cabinet ministers are using it – though strictly for “conversations below a certain classification
”. With the exponential increase in users it has also had to deal with questions over the effectiveness of its data security measures
and its lack of end-to-end encryption – with zoombombing
becoming the latest go-to distraction for online troublemakers.
Outside of work, all manner of services are offering free subscriptions for a limited time, or extended trials to entice new customers, from Apple Music and digital library Scribd, to language learning service Babbel
and Peloton’s exercise app
Whilst WHO guidance has been issued reassuring people that you cannot catch coronavirus from a print newspaper, many online newspapers and magazines have removed their paywalls, or lowered them for COVID-related news articles, pushing heavily for digital subscriptions to offset declining print sales
. The result being that some publications have actually seen their subscriber count rise
Streaming platforms have also had their already meteoric rise bolstered by the crisis. A report by Strategy Analytics anticipates that the COVID-19 pandemic will increase the streaming market by 5% in 2020
– that’s an extra 47 million subscriptions, in addition to the 96 million subscribers already expected this year. The massive gains in subscribers
that relative newcomers Disney+ and HBO Now have seen make Netflix’s healthy 47% increase in the same period seem paltry in comparison.
Meanwhile, the launch of Disney+ in Europe in particular could not have come at a more opportune time, with five million users downloading
the app on its first day of release. In the US, where the service launched in November last year, subscriptions tripled over the weekend
March, the same weekend that nationwide school closures were announced.
Some studios have made the decision to release a spate of films to streaming services early, as box office showings have dried up over the previous few weeks, while Netflix will soon be releasing a film dropped from release altogether
by its studio following the worsening outbreak. In fact, streaming traffic has reached such levels that governments have demanded that YouTube and Netflix lower their default streaming quality
in order to keep Internet traffic stable.
Catastrophe breeds innovation, and the coronavirus pandemic is no different, as several toilet paper subscription services
have sprung up to meet the exceptional demand that panic buying has generated; whether these conveniences will sustain a place in the market or be flushed away remains to be seen.
And the long-term outlook may not be so perfect for streaming services either; as none operate on a usage basis, extra viewing hours will ultimately count for nothing. And as job losses begin to mount, these monthly subscription fees may be one of the first places customers look to cut outgoings if money gets tight.
Those businesses that depend on non-essential services remaining open are finding themselves struggling to maintain their output; Sky Sports and BT Sport are allowing subscribers to pause or cancel their packages free of charge
, and will stop charging pubs – given their enforced closure, and the current drought of live televised sports. In fact, the subscriptions windfall that COVID-19 has unleashed may be short-lived if customers are forced to tighten their belts and cancel non-essential services.
While it’s easy to say with the benefit of hindsight that businesses should prepare for the unexpected, coronavirus is the most extreme example of a black swan event
that can affect any business externally or from within.
Any subscription business seeking to “flatten the curve” of cancellations and customer churn must ensure that the benefits of its offering are well communicated, the customer experience is smooth and that they have the measures in place to continue to deliver at scale: business contingency strategies, remote working procedures – and an ample supply of loo roll. Probably.