2022 is expected to be a year of innovation, growth, and opportunity in the Media and Entertainment segments. Backed by rapid technological innovation and a competitive industry landscape, the industry is expected to evolve towards faster digital acceleration. Elements like today’s divisive socio-political landscape and broader economic directives are all expected to impact the direction of the industry.
Key Trends Expected Across Media & Entertainment – DIF Research
Advanced Content Distribution Channels
Throughout the media and entertainment segments, investment into new content creation is reaching unprecedented levels as companies attempt to gain a competitive advance by generating engaging content. Consumer interest and customer acquisition remain key verticals under focus by industry leaders and new entrants. Even though the content is the central facet of the streaming experience, the technical structuring of the delivery mechanism is a key element that is being reimagined with structural decision-making.
The shift to direct-to-consumer efforts will remain a key priority for the industry in 2022. Leading stakeholders across the industry are focused on enhancing subscribers and improving retention as key performance indicators for services. With minimal switching cost, services are actively competing in a largely unprofitable market segment. The capital requirements of the streaming infrastructure emphasize the importance for media companies to double down on linear structures. Despite the decrease in revenue resulting from the streaming shift, companies need to maintain cash flow engines through conventional media offerings to facilitate a seamless transition.
In 2022, operations without expansive cash flows will need to navigate challenging decisions between growth and operational profitability. The balance between linear content formats and streaming capitalization is a key challenge that needs to be explored on an industry basis. Decision-making structures in the industry will need to be based around advanced modeling and planning frameworks to balance profitability with growth.
Simplified Content Accessibility – Creating Unique Experiences
In the competitive landscape of content aggregation, companies need to explore streamlined methods to deliver content to users. Users are looking for platforms that provide them with a well-rounded mix of entertainment and new content. Maintaining that balance is essential in the current ecosystem.
Customers anticipate seamless experiences from Sign-ups to billing and broader usage. As more companies become a part of the streaming infrastructure, leading stakeholders with enhanced investments will focus on creating simpler user experiences. Consumers are also actively struggling to find the balance between new content and old hits. The division of popular properties across multiple streaming platforms is complicating the discovery process for customers. DIF anticipates 2022 will remain a competitive year across the industry as stakeholders continue to lock in iconic properties to serve as acquisition tools.
Streaming platforms will also continue to invest in algorithm refinement to provide users with personalized recommendations based on their unique preferences and viewership patterns. Companies will also need to tailor their marketing efforts with the learning experiences of the algorithm to improve targeting across marketing channels. Platforms can focus on enhancing the value infrastructure by looking beyond content engagements to offer diverse revenue areas, including shopping, gaming, digital services, and even innovative technologies like Non-Fungible Tokens (NFTs).
In a competitive landscape where companies are attempting to capitalize on unique content offerings, offering broader engagement opportunities can be a viable way to offer a unique value proposition.
The Rebound of the Cinema Industry
The cinema and theatre industry was amongst the hardest hit segments from the pandemic. Movie studios have lost a significant chunk of their revenue to lockdowns and theatre shutdowns. Film releases have also shifted away from cinema releases to streaming platforms. However, the landscape has started to shift with improved vaccine delivery.
Despite the concerns posed by the Omicron variant, DIF analysis points to a positive landscape for the recovery of the cinema this year. Based on insight by leading Box Office sources, over 13 films managed to generate over $100 million in revenue on the box office in 2021. Despite the challenging landscape of the pandemic, the figure represents a massive appetite in audiences to engage with exclusive releases in theatres. The recovery of the cinema segment will be further supplemented with the release of postponed releases from the pandemic.
Film studios will continue to implement hybrid release formats with limited exclusive cinema dates to balance streaming growth and cinema revenue. After extended negotiations between the cinema industry and production companies, the industry is aligned on a 45-day exclusive theatrical window with a subsequent streaming release. The hybrid release model is expected to stay dominant throughout 2022 as studios attempt to balance between streaming expansion and cinema revenue.
Mainstream Non-Fungible Tokens (NFTs)
NFTs have managed to become one of the fastest-growing investment vehicles thanks to expansive interest from consumer and organizational investors. NFTs are emerging as a viable vehicle for the media industry to expand content arrangements and monetize IP content in leading marketplaces.
Early adopters are taking the lead in NFT investments across art, sports, and other popular segments. The development of blockchain technology is a critical element of NFT growth. The technology is expected to streamline the market around valuable media assets and intellectual properties (IPs).
Media companies have started to extend partnerships with specialized NFT companies and platforms to develop exclusive offerings. These releases are providing consumers with new ways to interact with their favorite characters from films, TV shows, and beyond. The growth of the phenomenon is also paving the way to the creation of digital communities united by the utility of NFTs. Mergers and acquisitions are also expected to be a significant phenomenon in the industry as leading tech players have signaled interest in NFT investments.
Summary – DIF Roundup
The media and entertainment industry has been at the center of a transformative period. The industry segment has managed to pivot from linear content formats to transformative streaming applications to reach wider audiences. DIF expected the segment to grow at an aggressive race based on the investment inclination expressed by leading technology and investment firms.
