Covid, Culture and Consumerism: Inside 4 Key Areas of Growth
For the first time in over a year, I've returned to Manhattan. It's hard not to look at the restaurants, retailers and theaters, all cautiously coming back to life, and think about what Covid has wrought upon these industries that represent the beating heart of the city I love. These essential New York businesses, along with travel, hospitality, live events and a number of other sectors, have been clinging to life since we were forced to shelter at home a year ago.
Their struggles are a big story that may take years to fully comprehend.
But it's not the only story.
As we sort through the remains of a difficult year, and continue to cautiously find a new way forward, we must take note of several markets that have experienced incredible growth despite our unprecedented circumstances—stimulated by innovation, necessity and even some good old-fashioned luck.
Today, we're looking at four such areas that have captured headlines in the past year: content consumption, cannabis, Clubhouse and crypto—the "four C's" of Covid culture. Below, we will examine how the pandemic accelerated adoption, shaped behavior, and caused seismic shifts for these industries, associated businesses and consumers.
Remember "watercooler television" or Must-See TV? You're not alone if you don't. The shared viewing experience today feels like a relic from a bygone era—one where the networks made the rules, people adjusted their schedules around the airtimes of their favorite shows, and big events like an HBO series finale or the Super Bowl brought us together. Now, thanks to over the top (OTT) platforms such as Netflix, Amazon Prime and Hulu, the viewing audience has the power to consume content how, when and where they want.
Welcome to the OTT era—a sector that, like gaming and esports, was already experiencing tremendous growth, but then saw that growth supercharged as a direct result of the pandemic. With movie theaters closed for an indefinite period of time, OTTs stepped up to meet a ravenous public's need for content with which to pass the time at home.
Many of us had cleared our Netflix queue one month into quarantine, which opened the door for new OTT services, including big plays such as Disney+, Peacock and HBO Max, to jump into the fray and quickly gather a huge subscriber base. Now consumers have hundreds of OTT networks to choose from, and while there will be some weeding out among these services as certain aspects of life return, our viewing behaviors have changed so drastically that we foresee success for many of them in the years ahead.
● Disney+, the Mouse's foray into the world of OTT's, hit full stride in 2020, with The Mandalorian reeling in Star Wars fans young and old.
● Netflix has more Oscar nominations this year than any single studio by a large margin.
● Many of the biggest films of 2021 will open on at-home platforms and in traditional theaters simultaneously—a practice necessitated by Covid but one that could be the norm for all but the biggest blockbusters moving forward.
2020 was a massive year for legalization in the U.S. A good portion of the growth was due to new states adopting weed laws, but it goes well beyond that. Covid caused the closure of activities that traditionally saw the majority of consumers' disposable income. With no concerts, movies, restaurants, sporting events or bars to visit, many American pivoted their leisure spending to cannabis—and as a result, you had lots of first-time customers, driving up 2020 sales.
In addition, as an industry matures, so too does our confidence in it. Cannabis was already legal in several states before Covid, so when the pandemic hit, you had more people turning to the product at the very moment when it was easier than ever to purchase and have delivered to your home.
The glut of dispensaries in many cities was due for a shaking out before Covid hit. There were too many players trying to get in on the gold rush. Like restaurants that were able to survive by pivoting quickly to pick up and delivery, weed retailers who had built a delivery infrastructure enjoyed the most success in 2020 and are now primed to survive and thrive in the post-Covid world where shopping habits have changed.
● Nationwide cannabis sales in 2020 increased 67 percent.
● The U.S. legal cannabis industry is currently valued at $61 billion.
● Stay-at-home orders caused spikes in cannabis delivery as high as 400 percent.
There's timing, and then there's Timing. Clubhouse has been the recipient of the latter. The social audio app has been the darling of the tech world since launch. Arriving during Covid at a time when people were in need of live conversations and the opportunity to meet strangers in passing, Clubhouse provided us with both.
Add the clout-chasing cachet of the invite-only system and the appearance of celebrities as diverse as Oprah, Elon Musk, Drake and MC Hammer, and you've got a buzzy cocktail served up at the perfect moment in time. Driven by conversations about everything from dating and politics to NFTs and A.I., Clubhouse has become that rarest of internet things—a place to learn and be entertained.
With a user base that continues to explode, going from 1,500 in May 2020 to over 10 million today, Clubhouse has inspired other major players to the social audio space. As Facebook, Twitter and Discord have their own competing platforms, this leaves the ongoing relevance of Clubhouse up for discussion. But whatever the end game for Clubhouse, it will be remembered as an innovator that sparked millions of conversations and a "voice in the void," at a time when we needed it most.
● Raised more than $100 million in capital.
● Achieved unicorn status from its $1 billion-plus post-money valuation.
Just as the average person was managing to cling to a shaky understanding of how cryptocurrency works, along comes a revolutionary concept tied to blockchain that everyone is trying to cash in on ... fast. Non-fungible tokens, or NFTs, are a unique digital imprint that can be placed on IP, physical assets, collectibles and content in order to verify its authenticity. The smart contract then lives on the blockchain, allowing anything to be digitally verified as a true "original," even if many can view its likeness.
NFTs arrived on the scene with gale force. And like a storm, you could either get swept away by it or catch a wave and ride the movement into future greatness. The concept behind NFTs is sound—admirable, even—as they provide an opportunity for artists, who have toiled away at their craft for years only to see little or no financial gain, to finally have a means of monetizing their work.
To those deeply involved in cryptocurrency and blockchain, the ascent of NFTs came as no surprise. What did come as a surprise, however, was the rapid rate it would enter our lexicon, and then be applied to so many mediums—from music to NBA highlight videos, art and collectibles. As of this writing, thousands of NFTs are dropped daily as artists and IP owners try their hand in this growing marketplace.
At first glance, it is hard to identify the connection between NFTs and Covid. The answer, however, becomes clear when you consider what artists lost during the pandemic. Galleries and live events, the lifeblood of the creative community, were decimated by the worldwide shutdown. The need for a revenue stream for all those involved was essential. NFTs provide not only a way to be paid for your work, but also the ability to be paid every time that work is sold to someone else—all this at a time when people cannot see it, or experience it, in person.
NFTs also play into what could be a fifth "C" for our article today—collectibles. Everything from comic books to Pokémon cards have seen a resurgence under Covid, as individuals seek the permanence and comfort these items provide during uncertain times. NFTs offer a chance to collect the previously uncollectible. Who wouldn't jump at a chance to be a part of something as revolutionary as that?
● Digital artist Beeple sold an NFT of his work for $69 million at Christie's.
● Dapper Labs, the startup responsible for NBA video highlight NFT brand Top Shot, recently raised $305 million.
● Sales at the NFT marketplace OpenSea went from $9 million in January to $95.2 million in February.
What's next, you ask? Only time will tell. And that is the key to all of these new products and behaviors. With a significant change in how we use our time, new forms of media, investment and entertainment captured our interest and will continue to impact our culture as we move into life after Covid.
NFTs are likely here to stay, but questions about their environmental impact are beginning to gain traction and will need to be addressed. Clubhouse, an idea too good to stay tethered to a single company, needs to innovate quickly if it is to maintain leadership in the social audio space. Legalized cannabis would appear to be safe as well, but if the last four years have taught us anything, it's that forward-thinking legislation can be undone at the stroke of a pen. Finally, OTTs may become the dominant force in content consumption, but the landscape is crowded—and people have only so much disposable income to spend on subscriptions.
We believe a promising future is ahead, driven by smart data, digital innovation and decentralized business models as long as we don't suffer from the attack of the SPAC—but we will leave that for another time.