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Media And Entertainment Business Review | Monday, March 06, 2023
There are predictions that the media and entertainment industry will continue to transform in 2023. Innovating businesses that successfully integrate their technology will have a competitive advantage and come out ahead.
FREMONT, CA: Gaming, social media, and streaming video are altering media and entertainment and enabling new business models. Moreover, all three industries are growing interdependently as a result of being a part of a larger and more complex media and entertainment ecosystem. Strong visions that encompass these sectors and move their entire industries ahead are likely to be developed by successful businesses. Here are eight trends that will likely dominate the media and entertainment industry.
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Focus on Sustainability
This year’s agenda is to cut down on carbon and promote a sustainable environment. The media and entertainment industry will focus on innovation, whether that means brands offering eco-friendly goods and services, media owners providing more energy-efficient services or content creators considering how their work may encourage consumers to live more sustainably.
Technology Investment
To improve efficiency, bear down on costs, and drive creativity innovative companies will continue investing in technology. The usage of artificial intelligence and machine learning solutions by media firms to accelerate operations and increase client interaction will grow in comfort. A growing number of filmmakers will also embrace virtual production, which can cut down on production timelines and move real-time computer-generated imagery (CGI) and visual effects from postproduction and onto real-life sets. Predicting the global revenue generated by Virtual reality in 2023 is $7 billion with an impressive 50 per cent leap.
Non-fungible tokens (NFTs) and the metaverse will continue to be the key subjects for discussion. In the latter half of last year, the hype surrounding them sharply diminished. Many people view this as positive news because the speculators have left the market, allowing for greater experimentation. Several media executives are researching how users will access content, interact with advertising, make purchases, and engage in social interactions during an immersive online experience.
Advertising Video-On-Demand Continues to Grow
Last year few popular digital platforms launched advertising video-on-demand (AVOD) tiers. AVOD provides consumers with ongoing, low-cost access to their favourite content. It opens up new revenue opportunities for streaming services. By the end of 2023, over two-thirds of consumers in developed nations would use at least one AVOD service on a monthly basis, a 5 per cent increase from the previous year. Moreover, all significantly developed market subscription video-on-demand (SVOD) services will have introduced an ad-funded tier to complement ad-free options sooner or later.
Advertising Growth
For the ad industry, the previous year was strong enough for growth, in the face of economic and political headwinds. According to the latest forecast, advertising industry spend is assumed to continue growing at a slower pace of 3.8 per cent globally. It is also anticipated that this year USD 740.9 billion will be spent globally. Despite the global economic challenges, major brands are likely to continue their investment in advertising. Essentially, investment in marketing remains one of the most effective kinds of defence during economic downturns. When circumstances are rough, strong brands hold onto more economic value and bounce back more quickly when things get better.
Media Deal Making
Numerous observers predict that the media and entertainment industries will continue to consolidate in 2023. Strategic combinations would rationalise an industrial environment that is currently dominated by global heavyweights, and provide cost savings that can be used to fund investment in improved content, marketing, and technology. If direct mergers and acquisitions are not an option for some media players, joint ventures and partnerships with competitors in the market can help to speed up market entry, share investment, and provide synergy benefits.
Inflationary Pressure
Many consumers are trying to cut back on spending with the rising cost of living. The consequences of this will be felt throughout this year. It is possible that consumers will cancel some subscription services in order to save money. However, it is important to remember that home entertainment can perform well during economic unpredictability. For instance, streaming is a more affordable form of entertainment than going out, and some analysts believe that if the economy suffers, more people may resort to these services to pass the time.
Recovery of Box Office
The global box office will keep improving, although sales will still be below pre-pandemic levels. Cinema office revenue will increase 12 per cent this year to $29 billion. The film industry will have to wait until at least 2024 to fully recover to pre-pandemic worldwide box office levels if the 12 per cent estimate holds true. The global box office in 2019 was 42.3 billion USD.
Quality Over Quantity
The boom in spending on original content is probably going to be moderate. Broadcasters and streamers are making adjustments to the more challenging economic environment that 2022 brought about. The overall spending growth on original content is anticipated to decline from six per cent last year to two per cent in 2023. Particularly streamers, who made significant financial investments to gain subscribers, are more concerned with profitability. Streamers are ordering fewer new scripted episodes but are looking for projects of a better quality that can have a significant impact. Also, there is a change in the commissioning of material to include more affordable unscripted formats.
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