Netflix Sees Increased Usage Due to COVID-19... Impact on Content Production Delays Needs Review

[Asia Economy Reporter Eunmo Koo] As social activities decrease due to the global spread of the novel coronavirus infection (COVID-19), an analysis shows that Netflix's usage is increasing. While its market competitiveness and dominance are being reaffirmed, there are concerns that the impact of content production delays needs to be reviewed.

On the 28th, Hana Financial Investment reported that as COVID-19 spreads worldwide, Netflix usage continues to increase to the point of overload concerns in Europe and other regions. Seungtaek Hwang, a researcher at Hana Financial Investment, stated in a report that "the rising trend of Netflix can be confirmed through search interest trends on Google Trends," adding, "Recently, interest in Netflix in the United States is higher than that of Disney+, and especially since Netflix provides services globally compared to competitors offering relatively local services, the global interest trend is clearly rising."

He also said, "The cancellation and postponement of many sports events, which could be considered competitors for screen consumption, and the postponement of the Tokyo Olympics will relatively increase interest in Netflix," and predicted, "As a result, the company could see a net increase in paid subscribers exceeding its first-quarter guidance of 7 million."

There is also an evaluation that the dominance of original content in the market is expanding. Researcher Hwang said, "Netflix is achieving success not only with series and movies but also with unscripted programs such as variety shows," and added, "They announced plans for seasons 2 and 3 of 'Love is Blind,' which received a strong response in the U.S., as well as season 2 of 'Rhythm+Flow' and seasons 2 and 3 of 'The Circle.'"

Local content like "Kingdom Season 2" is also being strengthened. Recently, Netflix announced plans to release numerous domestic programs and revealed six projects in Turkey. Researcher Hwang explained, "Netflix's position as a content distributor is being reaffirmed," noting, "Due to the impact of COVID-19, domestic films such as 'Time to Hunt' and Paramount's 'The Lovebirds' have given up theatrical releases and are being provided on Netflix, confirming its standing."

He pointed out that the impact of content production delays needs to be examined. Researcher Hwang said, "Due to changes in people's lifestyles caused by COVID-19, Netflix's stock price recorded a relative return of 23% compared to the beginning of the year, showing a relatively favorable performance." However, he foresaw the need to continuously monitor the impact of content production delays caused by COVID-19. Hwang added, "Netflix's Chief Content Officer (CCO) Ted Sarandos stated that there are no issues with providing new content over the next few months, but production of works planned for release at the end of the year has been halted," and said, "It seems necessary to continuously monitor the content production and provision situation and plans according to the COVID-19 situation going forward."