Last year saw significant growth for a range of online entertainment platforms.
Music, film, videos, and podcasts were in significant demand, and the companies that facilitate their broadcasts enjoyed widespread success. So what was the catalyst and who were the most successful companies?
Why are online digital entertainment platforms booming?
The increase in popularity has been driven by various factors. Initially, it was easier and more cost-efficient access to the internet, combined with an uptick in the use of smartphones, tablets, and computers. This shift towards a more digitized society was a great driver for online platforms offering streaming and similar services. A younger audience and a more tech-savvy older audience were also helpful in supporting the mainstream adoption of digital entertainment. But there was something unexpected that propelled the sector forward faster than anyone had anticipated.
By the end of the first quarter of 2020, most of the world was plunged into a lockdown due to the COVID-19 pandemic. Throughout the following 12 months, countries and vast swathes of the global population were in and out of varying stages of lockdown. This led to millions if not billions of people being stuck at home for a long period of time. Many turned to online entertainment and streaming platforms to help them face boredom.
Many companies noted huge increases in the number of new accounts, as well as increased online times amongst existing customers. This resulted in their stocks soaring. For traders, this was great news as increasing values provided multiple opportunities to benefit from the increase. CFD trading is a popular method of trading, especially in a fast-paced market prone to quick changes due to evolving social matters, and it allowed traders to speculate on the value change over a set period of time, instead of investing in the underlying stock. Anyone hoping to get involved in the CFD trading market should, of course, get acquainted with all the risks just as with any other form of trading.
Which ones are leading the way?
Two of the biggest winners in the recent entertainment boom have been music streaming platform Spotify and film streaming subscription service Netflix.
In 2020, Netflix broke its records in terms of new accounts. It managed to onboard some 37 million new users over the year, bringing the total of subscribers to over 200 million. Growth slowed during the fourth quarter of the year but the company still surpassed previous revenue expectations. In terms of its stocks, they peaked and then troughed, following its failure to meet the somewhat over-inflated expectations of analysts for the last quarter. In 2021, however, it’s been heralded as a “growth stock” that could have interesting medium and long-term benefits for investors.
Spotify, one of the world’s leading music entertainment services, surpassed 155 million users by the end of 2020. This was over and beyond what investors had predicted. It witnessed steady growth throughout the year in terms of both revenue and new subscribers. An interesting vertical of growth for the platform was the podcast section. Any creator can now upload podcasts to the platform, and traffic to podcasts of different kinds and types drove encouraged new users.
Another interesting contender for the year was Disney+ as it surpassed 100 million paid users by the end of the year. The growth and revenue provided by the platform helped Disney weather the financial losses of closed theme parks and delays in production and filming.
It's unlikely we will see such surges again, especially anytime soon. Growth will continue to slow down and stabilize, but there will be fluctuations as new products and options are launched. In a competitive and innovating sector, there are always surprises on the horizon!
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