People/Biz

COVID-19 ‘accelerating’ streaming transformation: KPMG’s Michelle Wroan

The COVID-19 pandemic could send broadcasters and streamers already shedding legacy business models barreling toward the “streaming wars” faster than anticipated. Michelle Wroan (pictured below), the national industry leader for KPMG’s Media practice, ...
April 6, 2020

The COVID-19 pandemic could send broadcasters and streamers already shedding legacy business models barreling toward the “streaming wars” faster than anticipated.

Michelle Wroan (pictured below), the national industry leader for KPMG’s Media practice, says the timing is “pretty good,” since many streaming platforms – most notably Disney+ and Apple+ — launched in the last year, giving consumers the opportunity to “explore” their options.

cq5dam.web.237.300“It’s helping the model from the standpoint that it’s accelerating the adoption of streaming by others who might not have adopted so quickly. We’ve seen huge surges in Netflix, Disney+ and others that have had large increases in subscriber base,” she says, adding it’s too early to say whether those subscribers will stick around after the pandemic.

According to Forbes, Disney+ subscribers more than tripled between March 14 and March 16 compared to the same period the week prior. Netflix, meanwhile, saw a 47% increase in subscriber additions, the publication reported.

“It’s accelerating the transformation we were already seeing,” Wroan says. “It’ll be interesting to see what that impact has, that shift, because it probably wasn’t planned to be so quick — in terms of getting your business model transformed, even just from a finance standpoint.”

NBC’s Peacock and WarnerMedia’s HBO Max, launching in July and May, respectively, are two of the most highly anticipated platforms joining the just-launched short form streamer Quibi and well-entrenched giants such as Netflix, Amazon Prime Video and Hulu this year.

“From the streamer standpoint, this really is an opportunity for them because they have a captive audience. So, if there was ever a time to attract subscribers to your recently launched platform, now’s a great time,” she says.

‘DARK PERIOD’

For other industry sectors, the outlook is less than rosy.

Measures to prevent the spread of the novel coronavirus, including the delay or cancellation of projects, have thrown a wrench into the gears of the global production ecosystem.

According to Wroan, one of the most important questions is whether those projects put on hold can be revitalized after the pandemic.

“Having to rearrange production schedules can be costly, just in terms of having all the resources you need, not to mention talent,” Wroan says. “There is going to be a dark period. When I say dark, I mean ‘lack of new content.’”

For many producers, efforts have largely shifted to development. Though the “creative juices are flowing,” Wroan says it will take time for any new content created right now to be greenlit and “brought to the point where it’s ready to go into production.”

Even more, the industry runs the risk of cannibalizing viewership and audience if a flood of new content is released at once, Wroan explains.

“There’s going to be this big hole of time that’s going to be a lack of new content that studios and producers and broadcasters will have to figure out how to deal with,” Wroan says. “Maybe it’s stretching out some of the stuff they do have on the shelf, but either way it’s still less than they were anticipating to have.”

The impending “dark period” could be more challenging for broadcasters than streamers, Wroan explains, since the sector is “reliant upon the content and having that available for them.”

Advertising revenue is shrinking now, too, Wroan says, as advertisers look to cut spending in the face of economic uncertainty.

“Advertising revenue for the broadcasters, specifically, is really important, and the social media platforms as well are a significant revenue stream,” she says.

As the industry faces unprecedented disruption, Wroan admits it’s difficult to predict how producers, broadcasters, streamers and other industry sectors will fare in the coming months.

“There are such far-reaching impacts to the ecosystem as a whole that it would take a whole lot more analysis to figure out,” Wroan says. “There’s a lot of uncertainty right now.”

About The Author
Barry Walsh is editor and content director for realscreen, and has served as editor of the publication since 2009. With a career in entertainment media that spans two decades, prior to realscreen, he held the associate editor post for now defunct sister publication Boards, which focused on the advertising and commercial production industries. Before Boards, he served as editor of Canadian Music Network, a weekly music industry trade, and as music editor for HMV.com. As content director, he also oversees the development of content for the brand's market-leading events, the Realscreen Summit and Realscreen West, as well as new content initiatives.

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