Coronavirus: SeaChange warns of operator impact and network strain
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Joseph O'Halloran
| 28 March 2020

Tangible evidence of the changing viewing patterns caused by the Covid-19 crisis is rolling in and the latest comes research from SeaChange which is warning of a massive impact on TV operators in terms of both increasing network infrastructure stress and decreasing ad revenues.

The video delivery software solutions provider has reported a 30% increase in streaming activity in March 2020 for linear, video-on-demand (VOD), and over-the-top (OTT) services across different platforms and networks. Furthermore, the company expects an acceleration of growth in streaming to continue as countries around the globe implement partial or total lockdowns to help mitigate the spread of the virus.

SeaChange noted that the spread of Covid-19 will disrupt what once were relatively predictable viewing habits, video service providers must figure out how to operate under rapidly changing circumstances. It adds that whether customers are signing up for new OTT subscriptions, purchasing premium VOD, or consuming existing video services, the network infrastructure is under high demand and that the rate at which these systems need to scale in order to meet the growing demand could not have been anticipated by the operators.

Worryingly, SeaChange added that advertising revenue has decreased more dramatically during this time and that while many associate increasing viewership with advertising revenue growth, the reality is advertising revenue is dependent on supply and demand. It warned that with more people staying home, industries such as travel and retail are massively scaling down their advertising efforts. As a result, operators and service providers were finding it even more difficult to fill their advertisement slots. With overall viewership is increasing, the lower demand and the subsequent lack of supply is taking its effect on the advertising revenue of TV operators.

SeaChange chief product officer Walid Hamri said that as a consequence of this is that with lower video average revenue per user (ARPU) and less overall advertising revenue, both traditional and OTT service providers are likely to further optimise operating expenses. “There is no denying the disruption in the video industry today, but service providers can proactively adapt by implementing a video delivery solution that is both scalable and flexible,” he said. “During these trying times and to prepare for future uncertainty, TV operators and direct-to-consumer service providers require a complete system that offers flexibility, scalability, and budget control.”