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Post written by:

Vincent Bonneau

IDATE Lab. Business Unit Director

If the confinement in Europe is still in its early days (with stricter measures being enforced in southern Europe than in the north), we are now able to measure the initial impact on the tech world in March 2020. The global health crisis is accelerating the digital transition (and especially its dissemination into certain social classes/strata of the population) but, paradoxically, this is generating very little revenue, due both to the surrounding economic context but also, and especially, to digital coverage rates that are often still too low, and the ongoing existence of vast dead zones. The coronavirus crisis has underscored the need to scale up digital tech, a sector with often massive fixed costs. 

The confinement has stripped down Europeans’ choices when it comes to leisure, entertainment and social interaction. So it comes as no surprise that digital service consumption has shot up, both on traditional (TV screen time has increased by more than an hour a day in France, for instance) and digital media. This increase applies equally to both private and work-related person-to-person communications using digital content, and especially video and video game use.  

Traffic on the networks has increased considerably as a result, especially on fixed networks and at weekends, starting with online video services – whose traffic has surged by as much as 50%, according to Nokia1. In Europe, this increase is nevertheless being contained by restrictions imposed on high-quality encoded content. But most SVoD services were already gobbling up bandwidth (aside from newcomers like Disney+ and Salto), as were most social media platforms. All of this sheltering in place has nonetheless enabled a handful of players to make a sudden name for themselves (e.g. Houseparty and its video drinks parties, source: AppAnie2or to expand their base (TikTok), typically thanks to a blend of social media and entertainment. The time spent on mobile phones rose by 20% YoY in Q1 2020, when the impact of the virus was not yet fully felt. Growth has been tempered by the use of Wi-Fi but also by the maturity of certain mobile applications (notably social media). 

Three types of service have seen the most spectacular rise in usage, all of which are best suited to fixed devices, and which had previously been adopted by only a small fraction of the general public. Teleworking, which is often used on a small scale, has been adopted en masse (sometimes by force), driving the use of audio and video conferencing tools up fourfold (source: Nokia) in a single week. The prime beneficiaries here have been Zoom3 followed by Microsoft and Google. Growth is still massive (x5 in one week, source: Nokia) for online gaming. Last are educational applications, especially those designed for young children, which are also seeing a tremendous surge in use, supplementing the solutions put into place at the last minute by schools. All of these applications are putting an added strain on the networks (individual video streams, latency, in addition to the usual demand for bandwidth) which is hard for traditional networks to sustain on a large scale, but being handled better by 5G and fibre systems. We are also seeing a rise in the use of fitness apps, albeit to a lesser degree. On the flipside, it is not surprising to be seeing a sharp drop in the use of ride sharing services, travel booking sites and sport news sites, while traffic on financial services sites is down overall. Dating apps are still humming along, especially those that have introduced an element of gamification.  

1 https://www.nokia.com/blog/network-traffic-insights-time-covid-19-march-16-march-22-update/
2 https://www.appannie.com/fr/insights/market-data/coronavirus-impact-mobile-economy/
3 https://www.journaldunet.com/web-tech/guide-de-l-entreprise-digitale/1443796-zoom-corrige-les-failles-critiques-de-son-application-de-web-conference/