This downturn is very different from prior scenarios. It’s having a significant positive impact on home entertainment, which is driven by a near-global shutdown of entertainment alternatives including movie theatres, theme parks, restaurants, bars, casinos, etc.
The home entertainment landscape is also significantly different today as streaming television and gaming have seen massive growth over the past decade. A lot has fueled this growth, including improvement in technology, better connectivity, faster internet speeds and the necessity for traditional media companies to find alternative sources of revenue due to the acceleration in cord cutting. The result of all of these variables has been a 75% increase in gaming[1], a 40% increase in mobile traffic volume and a 100% increase in Wi-Fi calling[2], with some internet service providers seeing broadband data consumption up as much as 40% during business hours and 17% during the peak 6PM-11PM timeframe[3].
The “stay-at-home” companies that benefit the greatest in this period include streaming TV and gaming, wireless and broadband cable providers who are benefitting from upgrades from DSL to cable and higher-priced data plans.
Leigh Todd, managing director and senior portfolio manager, Mellon.
[1] Fox news. Verizon CEO: Calls, texts hitting Mother’s Day levels amid coronavirus outbreak.24 March 2020. https://www.foxbusiness.com/technology/verizon-calls-texts-coronavirus-peak
[2] Lightreading.com. AT&T network ‘performing quite well’ despite ‘signs of stress,’ CEO says. 23 March 2020. https://www.lightreading.com/services/atandt-network-performing-quite-well-despite-signs-of-stress–ceo-says-/d/d-id/758413?_mc=RSS_LR_EDT
[3] Advanced television. Openvault: Covid 19sees business broadband up 41%. 20 March 2020. https://advanced-television.com/2020/03/20/openvault-covid-19-sees-business-broadband-up-41/
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