Snedker Roman posted an update 5 months, 2 weeks ago
In 2022, media and entertainment companies have a familiar landscape depending consumer behavior dynamism, technology, competitive intensity, and industry reshaping. Mix in the continued results of the pandemic on business conditions as well as the workforce, an inflationary economy, as well as a charged social and political landscape, and company leaders are steering through unpredictable terrain. Here are five trends to watch in the year ahead as the industry actively works to reframe its future.
1. Content distribution gets (more) complex
Investment in new original content shows no indication of slowing even as transfer to 2022. Content is the fuel that drives consumer interest and engagement across platforms – streaming, broadcast and cable networks. How a content reaches consumers, however, frequently involves an intricate decision-making process.
The direct-to-consumer (D2C) pivot will still be the key strategic priority for your industry inside the coming year. Operators and investors alike are focused on subscriber growth and retention since the key performance indicators for services where switching costs for rrndividuals are minimal. Despite their rapid growth throughout the last a couple of years, most D2C services run by media companies remain unprofitable and consume cash, devouring resources from the overall enterprise.
The capital intensity related to streaming highlights the benefit for media companies to reap the financial making use of your linear ecosystem. Whilst cord cutting gradually shrinks the universe of traditional video subscriptions, broadcast and cable networks remain cashflow engines. In order to avoid a dislocated unwinding from the legacy pay-TV environment and it is valuable monthly subscriber fees and advertising revenues, network owners must always direct fresh content, including sports, for their linear channels to help keep viewers engaged.
In the year ahead, operators (in particular those without the scale or capital resources to visit truly “all in” on streaming today) will be confronted with challenging decisions around programming their streaming platforms they are driving growth, whilst remaining profitable but structurally declining linear businesses to build cashflow. This can be a tricky balancing act.
Performing on these decisions will need sophisticated modeling and disciplined business planning that spans creative and executive priorities to own optimal mix of growth and financial outcomes.
2. Simplified and customized experiences take center stage
In 2022, consumers continuously seek out unique experiences and ubiquitous access to entertainment content. Businesses that solve the discoverability puzzle and aggregate content within a more intuitive and accessible way will popularity.
Consumers expect effortless interactions throughout the end-to-end customer journey, from sign-up to usage and billing. Accordingly, we will see more companies doing the streaming value chain. Network owners, broadband providers and connected TV manufacturers will likely be making plans to simplify, optimize and integrate layers and compatibility tools across platforms to boost the person experience.
Content discovery is now increasingly a hardship on consumers since they bounce between streaming services seeking new series and old hits one of many avalanche of obtainable programming. Tech-savvy businesses that harness valuable viewership data to give customers more of the content they desire will love a competitive advantage. In 2022, streamers playing catch-up will refine their recommendation engines based on demonstrated subscriber preferences and usage history, and tailor their marketing – in-platform and also over external channels – to produce consumers alert to each of the viewing options.
Bundling could also increase the buyer experience. The scaled digital-native streamers supply a number of integrated offerings to their video subscribers – shopping, gaming, devices, and other digital services. Media companies with diversified businesses or innovative partnerships with others – including in the digital asset arena (e.g., non-fungible tokens, or NFTs) – will try to create their own “flywheels” that offer a portfolio of offerings for their streaming subscribers, driving new sign-ups and adding stickiness for the D2C revenue model, extending the life of the customer relationship.
An in-depth lineup of desirable programming is table stakes for that streaming game. In an environment where people are juggling a growing collection of services and switching prices are low, media companies have to deliver an event that keeps subscribers connected and engaged.
3. Movie night will resume the theatre
The results in the pandemic about the movie business have already been severe. Cinema owners struggled to be open as moviegoers stayed away as a consequence of virus concerns and limited option of fresh film product. Whilst the emergence from the Omicron COVID-19 variant is adding uncertainty, you’ll find signals pointing to some constructive path forward to the box office in 2022.
In 2021, 13 films grossed over $100 million in accordance with Box Office Mojo, below over 30 in 2019. Nonetheless, brings about 2021 indicated a permanent audience appetite for “blockbuster” features as reopening around the world gained steam, prompted to some extent through the distribution of effective vaccines. Looking ahead, a strong slate of long-anticipated tentpole movies should help drive the recovery in theatre admissions.
A difference that can hold in 2022 is the abbreviation of the exclusive theatrical window to approximately 45 days and, for some mid-size films, a day-and-date release approach so that consumers to view new movies from the theatre or in your own home. Following a difficult group of negotiations between theatres and studios, the film industry have aligned by using an approach that preserves the highlights of the theatrical window while acknowledging the reality of streaming popularity.
The shorter first-run window will allow studios and theatres (and creative talent) to gain from successful major releases – namely the enormous ticket sales that take place on opening weekend along with the following a few months, plus the ability for studios to leverage marketing spend in support of a film’s premiere into future distribution windows, specifically fast-following D2C availability.
4. NFTs have entered the press chat
Excitement is building around NFTs as a vehicle for media companies to expand engagement making use of their content and IP and could provide a future monetization model because market matures.
Early adopters are getting NFTs connected to sports, art, collectibles and much more, acquiring one-of-a-kind digital assets which might be easily tradable and whose ownership and authenticity are recorded via blockchain technology.
To join encounter, media information mill forming relationships with NFT technical specialists and marketplaces to produce offerings that enable consumers to be involved in a totally new way using their superheroes, movie and TV show scenes as well as other content. NFTs allow media industry players to generate cross-platform consumer interactivity anchored in proven IP and build new communities by extending the consumer relationship into emerging digital areas.
In 2022, the media and entertainment industry will undertake a lot of NFT innovation and experimentation. Auto return of the efforts is unclear; today, NFT projects in the media and entertainment space are essentially marketing investments designed to power engagement and access fans – in particular those active in crypto – wanting to deepen their connection to popular content. Down the road, media companies could generate royalty income related to secondary sales of NFTs… perhaps in transactions associated with activities going on in the metaverse.
5. M&A remains a favorite item about the menu
Over the past 12 months, the media and entertainment industry saw the largest players execute on the number of transactions – landscape-shifting megamergers, bolt-on acquisitions of smaller studios including properties positioned in international markets that produce localized content, targeted deals for niche IP assets that may be leveraged to create fresh programming, and innovative joint ventures supposed to accelerate global streaming growth with a capital-efficient basis.
In 2022, the consolidation of studios and networks will keep as companies look to build the information, capabilities and scale needed to battle the digital-native behemoths who gain from tremendous financial and operational advantages.
After deal headlines fade, management teams will face the heavy lift of integration, right-sizing and realigning front office operations, IT systems and company infrastructure to attain ambitious efficiency goals. Cost savings realized through integration will fund future growth investment and boost profits, an important objective because industry transitions in the stable, high-margin linear world to a streaming ecosystem that drives less-profitable revenue (in the meantime).
Robust conditions privately and public capital finance industry is enabling companies to offer non-core businesses and other corporate assets that no longer fit their evolving growth strategies or capital allocation priorities. Accordingly, asset divestitures would have been a key trend in 2022 as well. Activist investors can play a job in some of these transactions, being another catalyst for change.
The press and entertainment industry has long been a whirlwind of strategic activity as companies build, renovate and tear down business portfolios in response to market developments, and 2022 won’t be any different. These five trends indicate that this media industry is poised for one more year of exciting change, as companies drive innovation, tackle new challenges and capture opportunities to position themselves for growth.
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