The COVID-19 pandemic, an infectious disease caused by the newly discovered coronavirus, has spread at a rapid pace across the world since its initial outbreak in Wuhan, China on the 18th of December 2019. It is currently difficult to determine the full-scale impact it will have on globalization, but it has caused noticeable effects that vary between different industries. Some of these effects include the increase in remote work and studies, changes in food consumption, and tourism cancellations. This has an indirect effect on cultural interactions in entertainment forms and a notable influence on public behaviors and cultures. This report shall cover the effects of the pandemic that are relevant to the live streaming services research, to give an indication of the magnitude of impact and how long it may take to recover.
We hypothesize that prior to the outbreak, live streaming services played a key role in steering e-sports and professional gaming, as well as social media users, towards using westernized entertainment forms. This resulted in its users, especially in regions that had a lower cultural distance to western countries, increasing their exposure to western cultures by often interacting with western gamers and social media users. By doing so, we believe it led to a minor setback in affecting their domestic cultures, influencing them to take a break from their cultures and occasionally expose themselves to western entertainment forms. This shall be evaluated using the push-pull theory, as the pandemic has caused the temporary removal of offline e-sports and events, which was a westernized instruction from an increase in interactions. This impact on the globalization pause will be measured by changes in consumption of entertainment forms that are associated with a cultural distance from their own, as well as activities that are no longer feasible to do due to the pandemic.
The purpose of this research report is to comprehensively analyze how the COVID-19 pandemic has affected globalization through live streaming services in games and social media in a westernized country such as Japan. The expansion of e-sports into the public for organized and casual competitive online gaming, as well as professional gamers using social media platforms to engage with their viewers, has influenced a change in trends between its domestic and international users. They are searching for a westernized approach to entertainment due to an increase in interactions between users around the globe.
Background of Live Streaming Services
Live streaming has become a popular form of entertainment, learning, and content creation. The concept of live streaming has existed for a long time, but with the availability of high-speed internet, it has become a popular form of entertainment and content creation. It used to depend on a television broadcast or the infrastructure of the venue to broadcast an event live. However, now using widely available platforms such as YouTube, Twitch, Instagram, and Facebook, anyone can broadcast a live stream. It has become a popular way of creating and consuming content, with an incredibly large diversity of content and an equally large number of viewers. Anyone can use live streaming to create content, whether it be for sharing gameplay, teaching music, cooking, fitness, or anything else imaginable. With the current global COVID-19 pandemic, the commercial live streaming industry has experienced a significant increase in the number of viewers and income. This phenomenon is not exclusive to commercial content creators; individual people have made a similar shift. This can be described as a paradigm shift of how we consume entertainment and teach from meeting in person to moving online.
Overview of COVID-19
It is clear that the COVID-19 pandemic has had a profound impact on the digital industry, and the live streaming sector in particular. With many activities, events, and entertainment options heavily impacted by social distancing measures and lockdowns, increasing numbers of consumers have turned to online sources of entertainment and digital content throughout 2020. Subsequently, increasing demand and consumption of digital entertainment has cultivated growing interest and investment toward live streaming as both consumers and content creators shift their habits and consider live streaming as an alternative form of leisure and entertainment. Research on the impacts of COVID-19 spans a multitude of industries and variables, and our ongoing research on this topic will continue to investigate the effects on live streaming services and behaviors in greater depth.
To keep the virus from spreading, many countries started closing schools, businesses, and any activity causing large crowds to gather. It caused much inconvenience and loss of income, thus raising anxiety and fear around the world. With so much activities had to be canceled and restrictions imposed on various events, online activities began to flourish. At the heart of the surge in consumption of digital content was the online streaming industry, and the consumption trends reflected in the data were consistent with the increasing demand for live streaming services. This preliminary insight demonstrates evidence of a substantial increase in demand within the live streaming industry during the early stages of the COVID-19 pandemic period.
The COVID-19 pandemic is the defining global crisis of our time and the greatest challenge we have faced since World War Two. Since its emergence late last year, the virus has spread to every continent except Antarctica. Deaths have passed one million, and more than 33 million cases have been reported.
Increased Demand for Live Streaming Services
The global COVID-19 lockdown has caused a sharp increase in internet usage with leisure, and that includes the consumption of entertainment since people are restricted to household entertainment. There has been a rise in online film and music festivals and the broadcast of archived events. With the enforcement of travel bans and the cancellation of public events, many events such as music festivals, concerts, and sports events have been canceled or postponed. Event organizers have sought alternatives to keep their audience engaged or to drive fundraising while implementing cost-saving measures to minimize losses from the canceled event. An alternative choice is to have the event as an online event, which still utilizes the same use of visual and audio and has access restricted through payment. This has seen some music festivals and concert organizers using live stream services and advertising through social media platforms. An example is a music festival event called “Room Service Music Festival” aimed to be live-streamed on April 24-26, featuring artists from various music genres from EDM to rock and jazz. This leads to increased consumption of live streaming services in terms of advertising and the live stream event itself. High viewership may also lead to the possibility of recurring future events.
Live streaming services have become an essential platform for communication and entertainment, holding an extensive range of events in the modern world. Until the outbreak of COVID-19, live streaming was mostly initiated by popular internet influencers to broadcast live events through streaming that was only limited to a certain group of audience. Live streaming services were experiencing slow growth in consumer demand, but since the pandemic has resulted in the enforcement of lockdowns and social distancing around the world, live streaming services have experienced exponential growth in demand by consumers, event organizers, and educators.
Rise in Online Entertainment Consumption
The demand for remote entertainment has experienced a sharp increase during the pandemic. Countries around the world have implemented lockdowns and stricter measures to minimize the risk of spreading COVID-19. This has caused individuals to seek alternative forms of entertainment, leading to increased demand for live streaming services. As most people are accustomed to leaving their homes to be entertained, the issue of staying indoors for prolonged periods has begun to take its toll. This has led individuals to seek means of remote entertainment through different video streaming services. One form of such entertainment includes watching live streams of events. These can range from live music performances to live gaming tournaments. For instance, data from Stream Hatchet and Streamlabs revealed a 99% increase in streaming hours within the first quarter of 2020. Additionally, in March due to lockdowns initiated around the world, there was a 20% increase in overall streaming hours compared to February. YouTube also revealed a 13% increase in revenue during the first quarter of 2020. This was driven by a spike in user engagement, enhanced through an increase in streaming hours and ad impressions. Live streaming services offer different forms of interactive entertainment between streamers and their audiences in real time. This may include streaming music performances, art demonstrations, or discussions between the streamer and audience. One significant aspect to note is that live-streamed events offer a form of social interaction for both the viewer and the performer, something that is sorely missed through traditional forms of entertainment that would usually involve a crowd or live audience.
Surge in Virtual Events and Conferences
Due to the global lockdown and social distancing measures, many events and conferences have been cancelled or postponed. As a result, there has been a surge in the number of virtual events and conferences taking place, as organizations have had to find an alternative way to engage with their intended audiences. Virtual events and conferences can take place using live streaming services, with keynotes, talks, and panels being delivered to the remote audience at a specified time. This has often been supplemented with the session being available on demand after it has taken place. An example would be the recent SXSW 2020 which was cancelled due to COVID-19, but a large number of the panels and talks are being rescheduled using virtual platforms. This has led to growth in the B2B sector with brands and organizations trying to find ways to keep their audiences engaged, with Townhalls being another example of a virtual event which has grown during the pandemic. The impact on live streaming services due to the surge in virtual events and conferences is certainly positive in terms of creating new business, and this new business could lead to a long-term change in the landscape. As mentioned earlier in this article, if the quality of the service and the content is high, people are more inclined to continue using a paid service. Therefore, if the virtual events and conferences are successful, this may lead to long-term contracts with the live streaming services.
Expansion of E-Learning and Remote Work
Remote work activity has also reflected on the growth of live-streaming services. This had a major impact. Romanus Berg, the COO from Crowd Cast, stated on his blog on COVID-19 that they have seen a rapid boost in streaming for company town halls, product announcements, and company meetings. Although Crowd Cast’s target audience is small businesses, startups, and creators, this also applies to larger enterprises and schools as they also have company meetings and representative seminars. This shift from physical to digital activity directly reflects the surge in virtual events and conferences, but in a broader sense, it is increasing the demand for live-streaming services across all industries.
An example of e-learning market expansion is shown in Figure 1 taken from the Annual Report on the Movie and Video Production Industry 2020 published by the Japan Video Software Association (JVA). It compares the market scale for home educational materials with the market scale for off-school private tutoring. In a scenario where schools have closed temporarily, children are left to study from home, thus increasing the demand for home educational materials, which also includes e-learning. JVA has predicted the market scale for home educational materials to skyrocket. While it’s not an overseas online education league, it has shown that COVID-19 has presented an opportunity for e-learning to develop educational resources.
The expansion of e-learning and remote work is the outcome of the rise of COVID-19. Online education today is fundamentally breaking through traditional customs, which is why the pandemic has further accelerated the growth of online education. This has been very beneficial for the e-learning industry. Before the COVID-19 outbreak, distance learning implemented as an alternative approach for schools and universities was already on the rise. According to a US HR professionals survey conducted in April 2020, nearly three quarters of the respondents reacted to having most employees work remotely, and six percent reacted to having most employees work remotely for now. This shows that both education and work are turning towards remote activity. Thus, in terms of online education practice and utilization, it has widened the learning ecosystem. At the Asian Leadership Conference held in South Korea, former UN Secretary General Ban Ki-Moon stated that COVID-19 will bring the rise of tele-education, which is an open opportunity for the e-learning industry to get involved. In addition to the standard methodologies where students access and learn from pre-recorded e-learning materials, there has been an increasing trend for students to make use of live-streaming services given its flexibility and real-time interactions with educators. This live-streamed online tutorials and lessons are equivalent to private tutoring, making this a vast opportunity to increase e-learning revenue. The increase in e-learning revenue and off-site work activity is a balloon effect from COVID-19, as there is a likelihood that academics and learned skills may nearly or fully shift to digital platforms. This is a vast contrast to previous trends.
Challenges Faced by Live Streaming Services
Overall, live streaming services need to address these challenges in order to provide a seamless and enjoyable experience for their users.
Monetization and revenue generation is also a challenge, as many service providers struggle to generate enough revenue from streaming to cover the costs of providing high-quality content.
One of the challenges is network congestion and bandwidth limitations, which can cause delays and affect performance. Maintaining quality and reliability is another challenge, as streaming services need to prioritize improvements in stream quality while keeping costs in check.
Live streaming services face several challenges in their normal on-demand video delivery, as they need to adapt to evolving technologies and improve the overall consumer experience. These challenges can be grouped into four categories: technology and distribution network, equipment and support services, streaming guide configuration and usability, and the use of traditional and new media for broadcasting.
Network Congestion and Bandwidth Limitations
Unfortunately, in times of severe network congestion, there is not a lot that can be done. The internet was not designed for quality of service, and consumer-level ISP links provide no QoS guarantees or prioritization of data. It may simply be a case of waiting for internet infrastructure to improve as global internet demands increase, in order to adequately support live video streaming.
High latency can be very disruptive to a viewer’s experience, causing long load times, lower quality video streams, and a higher chance of service interruption. Traditional online video-on-demand services like YouTube can use buffering to combat these issues, but live video does not have this luxury. If the stream quality degrades or the stream drops, viewers will quickly leave and may not return. This can be very damaging to the service provider, especially if they are reliant on ad revenue.
Live streaming is a data-heavy application and it requires a fast and stable internet connection to work as intended. Unfortunately, most internet service providers utilize shared infrastructure with oversubscription to serve their customers. This works well most of the time but during peak hours, especially in the evenings, weekends, and public holidays, this can lead to congested networks and increased latency.
Maintaining Quality and Reliability
Live streaming services use adaptive streaming methods to handle unstable network conditions. Lower encoding resolution and bitrate result in smaller media chunks, enabling faster transmission and better resilience to packet loss. If there are network degradations, the stream can adapt by switching to lower quality video in the next segment. Implementing this mechanism is complex and requires thorough traffic engineering to determine when and how to switch quality levels. Some services may also use error control methods to ensure reliability, including retransmission on packet loss, but this adds latency to the stream.
Live streaming services have always been focused on ensuring quality and reliability. Video quality plays a crucial role in customer satisfaction. Several factors affect the quality of a video stream. In traditional streaming, quality is controlled by the server, limiting the resolution, encoding format, and bitrate of the media. UGC platforms and social media also have similar limitations on quality due to bandwidth and cost considerations.
Monetization and Revenue Generation
There are many ways live streaming services can monetize their offerings. Step one is identifying the type of content that will be attractive to an audience who will be willing to pay to view it. There are a few different models such as Pay-Per-View, subscription-based models, and advertising-supported models. The PPV model is, in essence, the most simple in that the viewer pays a flat fee to watch the stream or event. This can be effective for streaming live events as the streamer can realize in advance how much revenue the event will generate. Subscription-based models are a bit more complicated, requiring that the viewer pay a monthly fee to access the stream. This model can work if the service has enough content or events to keep the subscriber coming back for the duration of a month or longer. Advertising-supported models are the lowest revenue generators as ad rates are currently very low for streamed media. Also, many viewers are now using ad-blocking software, further reducing the effectiveness of ads as a revenue source. Live streaming services can also use a tiered service model with premium content at a higher price to entice viewers to pay more for higher quality content.
Future Trends and Opportunities
The increasing accessibility of the technology required to produce live or video-on-demand content is already highly apparent. The future will see more innovation in technologies necessary to make live streaming content more user-friendly, cost-effective, and faster to market. This spans from easier-to-use content delivery networks and the development of player technologies, to further simplification of live production tools. An example of this has been the rapid growth of the online video platform (OVP) space.
By January 2020, when COVID-19 started to evolve from a regional threat to a global pandemic, the trend and development of live streaming have been accelerated far beyond most people’s predictions. Even the most conservative projection must now be recalibrated. In less than six months, not only has the goalpost moved, but the trajectory has increased almost exponentially, and the industry has seen its potential brought forward by several years. A key question now is what the lasting impact will be, and what long-term accelerants it will present to the live streaming industry. This section will look into the opportunities and potential trends that live streaming might benefit from, thus creating new development and possibilities for the technology throughout its entire industry.
Innovations in Live Streaming Technology
With the boom of live streaming services in the past decade, it is no surprise that there would be innovations on how the streaming experience would change, particularly in the technology behind it. One very recent development, which has had a wide effect on the industry, is the delivery of live streams through mobile apps. Twitch, the leading video game streaming platform, released their mobile app in 2011, just 15 months after the release of their initial platform. In 2016, they released a version that was integrated with mobile games, allowing users to directly broadcast the game they were playing from the same device they were using to play it. Beforehand, one would need to invest in a capture card, a PC, and a console, as well as the time to set all of this up. This made a live stream far more accessible for both the broadcaster and the viewer. This shift in convenience has been largely responsible for the influx of new streamers and viewers to certain platforms. Another innovative development has been the push for more interactive streams. An example of this can be seen with the streaming platform Caffeine, which received funding of over $100 million from 21st Century Fox, as well as investments from other big names such as Andreessen Horowitz, Greylock Partners, and other individuals like former Apple executive Eddy Cue. This platform was created with the goal of making streaming a more social experience and boasts a variety of social and broadcasting features. Viewers can join a virtual “party” hosted by the streamer, which is a private video call between the streamer and a select group of viewers. These viewers can then hear the audio from the main stream and still talk with the streamer. The aim of this feature was to make the streamer feel more connected with their viewers. Other features include a centralized and easy-to-use group chat for all viewers and simplified tools to allow viewers to become co-hosts. Another example would be the integration of Twitch logins with the game Streamline, allowing users to control the game while they watch the stream. Viewers can also interact using a variety of other mini-games and point systems created by the broadcaster using the Streamline SDK.
Integration with Social Media Platforms
In the case of Facebook Live, Roderick Alemania, in an interview with Influencive, outlines why this platform could do damage to current giants in the industry. “I feel that the future of gaming content and potentially live streaming may be short form. We’ve already seen the decline of TV viewership, and people on the go seek something quick and easily digestible.” Considering that the majority of video games and gamers themselves can fit this bracket, platforms like Facebook Live aiming to target their audience’s short attention span with games or esports may just find market success.
Caffeine has already received two rounds of substantial funding in hopes of creating a fresh player in the streaming “game”. Their focus is moving away from the traditional video game-based audience and instead aiming to lure fans of TV series and music through the use of generated live content based on what the viewer is interested in. Caffeine isn’t trying to reinvent the wheel here; they’re just making it look shinier. In the age of the atypical TV viewer who feels personally involved in the entertainment they choose, this could be a breath of fresh air.
It is no secret that the dominant players in the live streaming scene, Twitch, Mixer, and YouTube Live, make up 25% of the entire market as of 2018. However, with the fast growth of platforms like Caffeine and Facebook Live, we could well see a changing of the guard in the next five years.
Potential Growth in Niche Markets
As noted previously, COVID-19 has prompted a surge in live streaming services. This was demonstrated by Twitch, a dominant platform for gaming and esports live streaming, which saw a 31% increase in viewership in March, with a large part of the increase being attributed to the global pandemic. This suggests that while live streaming is already prevalent in certain niche markets, the current increase in general live streaming may lead consumers to become more familiar with the technology, thus increasing its potential as a means of delivery for niche markets.
The potential for growth of live streaming into niche markets hinges on its capacity to provide content to a target audience, while allowing for the interaction and community that is essential for small-scale content producers. Potentially, live streaming will provide an alternative form of communication for small business-to-consumer operations in a variety of markets. For example, the personal fitness industry could utilize live streaming as a means to provide at-home workouts and connect with clients on a more personal level, overcoming the limitations of pre-recorded video services. This could also be the case for music teachers and their students, while offering them a chance to interact musically in real time.