More COVID Winners
From Zoom to cannabis, from telemedicine to leisure travel, Center director Jeffrey Cole analyzes the industries coming out of the pandemic stronger than ever.
By Jeffrey Cole
This is the third of a three-part series about the winners and losers as we start to emerge from the COVID pandemic.
In Part 1, I covered COVID losers: cash, Uber and Lyft, in-person shopping, commercial real estate, business travel, and mental health.
Fortunately for all of us, there are more winners than losers, so I started reviewing the winners last time in Part 2, talking about Amazon, Disney, Netflix, and Labor.
Let’s continue with more winners.
Never has a company gone from relative anonymity to becoming a verb in daily use in less than a month. It took Xerox, Google, and Uber years to become parts of speech. By April of 2020, school kids, workers at home and the rest of us were Zooming.
There is no surprise that we were ready for video conferencing. Well over 90% of the country had access to computers, tablets, and especially smartphones. Computer cafes to help those without their own devices to get online disappeared years ago for lack of need.
Almost as many people had access to high-speed broadband, but not always enough broadband… as we quickly learned during COVID. When two kids, two parents, and a grandparent all wanted to be online at the same time using bandwidth-hungry video, home connections slowed down, and choices had to be made.
When schools and offices sent people home to continue their learning and work lives online, we were almost ready. Sales of cameras and microphones to replace the mediocre ones in our devices soared. Within a few days or weeks, we could Zoom.
Microsoft Teams, Google Meet, and Cisco’s WebEx were not where we turned; instead, we went to Zoom. When COVID began, Zoom had been around for more than eight years, but few were familiar with it. Moreover, Zoom was not backed by a massive and familiar company like Microsoft, Google, or Cisco. It was an unfamiliar product from an unfamiliar company. That was exactly what people wanted. It felt innovative and fresh, not just another part of the Silicon Valley machine.
Whatever the reason, Zoom’s growth was nothing short of spectacular. At the beginning of 2020, its stock price was $67. By the middle of 2020 it had increased by almost 850% to $559. In the same period, its market cap increased from $18.8 billion to $159 billion. These are numbers straight out of a Frank Capra movie.
The other guys, even though parts of trillion-dollar companies, never caught up. As data from the Center’s COVID Reset Project makes clear, Zoom will retain its leadership. While the number of hours we spend on Zoom will inevitably decline as we get out of the house, the number of subscribers who need access (although less time on it) will remain stable.
COVID changed our lives and our behaviors. Essential parts of life (school, work, movie theaters and shopping) came to a sudden stop. We were forced to try new ways of doing things. We found some of those new ways had significant advantages. Some of these new ways may significantly recede as soon as it is safe, particularly going to school online. But other changes are locked in and have permanently changed important parts of work, entertainment, and medicine.
When looking at COVID’s losers, we saw that a third of business travel will never return. But the news is not all bad for airlines, cruise ships, hotels, rental cars, and tour operators.
Leisure travel is already exploding. We haven’t seen anything yet.
After two years of being stuck at or close to home, filled with fear, we are ready to get out and see the world. While some places are still restricted, the desire to travel is being unleashed after a painful two-year absence. Some of us lost our jobs or saw work cut back, but those who continued to work from home accumulated massive amounts of money that would have gone to travel and entertainment (restaurants, concerts, and movie theaters).
Now we’re ready to spend that money and more on traveling.
We’re done looking at the same four walls in our homes and ready to get out there, everywhere, to have experiences. COVID taught many of us that these experiences are more important to our well-being and pleasure than material goods.
Airlines and hotels are already at pre-COVID levels. By the middle of the year, new records will be set. Those records will be necessary for profitability since less expensive leisure travel will be replacing the much bigger spend of the business traveler.
It took a pandemic and doctors unwilling to see patients except for emergencies (and not always then) to kickstart telemedicine. We just didn’t want it before COVID. Seeing the doctor meant seeing the doctor in person, particularly if you were older and less comfortable with technology.
Then COVID forced us to use telemedicine, and we liked it! Our COVID Reset work shows that 75% of the population have used or are willing to use telemedicine. Much more impressive, satisfaction levels with tele-medicine are at 89%. Almost nothing is ever that high.
We love not having to commute to the doctor. Not paying for parking (which is always too expensive¬¬–$14 in one recent case for me). It also meant not sitting in a waiting room with sick, possibly contagious, patients for up to an hour.
Even if the doctor was late (and most were not on Zoom), we waited in our comfortable homes doing other things. Our lives did not stop while waiting for an appointment to begin.
Looking at the 11% who used but did not like telemedicine, their complaints were not based on the quality of the care or getting their needs met. Their unhappiness came from feelings of “not really being seen” or “getting enough attention.”
Moving out of COVID, telemedicine has become a permanent part of medicine. We will still see the doctor in person. Our first appointment with a health care professional will likely be in person to establish a relationship and a feeling of trust. And we will always see the doctor when we have a condition or problem that must be felt, squeezed, or touched.
A winner along with telemedicine itself will be local CVS, Walgreens, urgent care centers, and annexes. Since we won’t be in the doctor’s office, we’ll get our blood tests, blood sugar or blood pressure checks, and other tests done at these places and on our own schedules. Our lab work and testing will be done days or weeks before the online appointment and electronically shared with the doctor to discuss during the virtual visit.
Medicine will never be the same.
The growth of cannabis from an illegal substance to another form of therapy or medicine started before COVID. Many states have some form of legalization (although more likely for CBD than THC). National legalization is on the horizon. Going a big step further, Oregon and the city of Denver have already legalized hallucinogenics for treatment of anxiety, PTSD, and depression.
During COVID, the Center’s work showed that 27% of the population was eating more than before March of 2020 (with expected weight gain). And 33% were drinking more alcohol. But cannabis use was up for 43% of the population. Whether because of anxiety, to feel good, or just boredom, people turned to cannabis.
Many tried oils, edibles, sprays, and vaping (and to a lesser degree smoking) for the first time. It could be delivered to the door without any direct contact with cash or a delivery person. As a process, it was just like ordering from Amazon. (And look to Amazon to move into the cannabis business in the near future.)
The stigma around marijuana has largely disappeared. Rather than buying substances of questionable quality from shady characters, we go to corner dispensaries, or have it delivered. Cannabis is one of the few issues that unite Republicans and Democrats. The latest national legalization bill was introduced in January by Republican Nancy Mace of South Carolina. Before long, cannabis drinks will be sold by Pepsi. Edibles and oils will be sold at Wal-Mart.
This was all coming, but COVID moved it along much faster than anyone predicted.
These are the winners.
There are other companies and industries that emerged from COVID stronger than ever, especially Electric Vehicles (EV) and semi-conductor chips. COVID coincided with their growth but had little to do with it. Historians will look at the stratospheric rise of gasoline prices as a major spark for EVs. Tesla, worth more than all world’s automobile companies combined, has never spent a penny on marketing or advertising. The only marketing they need is for every corner gas station to post prices. The wait for a new Tesla is current well over six months.
On the losing side, Facebook has faced immense financial challenges (losing more money in one day than any company in history and losing a third of its value in weeks). It also has been accused of lying about how Instagram affects the self-images of young girls and condemned for its feeble attempts to curb misinformation. All this happened during COVID, but not because of it.
COVID changed our lives and our behaviors. Essential parts of life (school, work, movie theaters and shopping) came to a sudden stop. We were forced to try new ways of doing things (buying online, telemedicine, Zoom). We found some of those new ways had significant advantages.
Some of these new ways may significantly recede as soon as it is safe, particularly going to school online. But other changes are locked in and have permanently changed important parts of work, entertainment, and medicine.
Jeffrey Cole is the founder and director of The Center for the Digital Future at USC Annenberg.
See all columns from the center.
March 22, 2022