Halfway into 2023, looking closely at the trends shaping this dynamic sector’s future is essential. From immersive experiences to digital streaming, let’s explore the exciting developments driving the media and entertainment industry.
Decreasing attention spans: The momentum in short-form videos
Today’s users demand digestible content. What started with short videos on Vine today represents one of the most powerful forms of entertainment and an effective method to engage an audience.
People’s attention spans are shrinking: 50% of users surveyed by TikTok said videos more than a minute long were stressful; a third of users watched videos online at double speed. Also, users are often twice as likely to share short-form videos than lengthy content. This means brands must adjust to provide compelling content that catches the customers’ attention.
The big names in entertainment are already employing different strategies. For example, YouTube implemented short videos on its platform, similar to TikTok and Instagram reels, and is now taking this initiative further with changes to YouTube’s Partner Program, which from February started to share ad revenue with Short creators.
“TikToks and YouTube shorts are a huge trend; maybe we are not seeing the full impact yet, but it’s what the young generation is consuming today – short content over complete movies! The attention span to one piece of content is not as long as it used to be.”
Pablo Peranzola, Global VP of Technology, Globant
New focus areas for streaming companies: From content to profitability
Streaming services represent a vast piece of today’s entertainment ecosystem. They accounted for 34.8% of TV screen time in July 2022, while cable and broadcast (i.e., traditional linear TV) accounted for 34.4 and 21.6% of total viewing time. The sector is projected to grow by more than a quarter by 2025.
However, after an economic downturn caused by the pandemic, today, consumers think twice before spending their money on a streaming service.
To navigate this scenario, companies offer FAST services (free-ad-supported television) or AVOD (advertised-based video on demand). They are essentially free streaming services with ads in the middle, ironically, a similar model to traditional TV. Research shows that 59%of users were happy to watch a few ads an hour in exchange for a cheaper, or even free, subscription.
Companies like Tubi or Pluto already run this business model. Netflix benefits more from its ad-supported plan ($6.99 per month) than its regular subscriptions.
“The biggest media and entertainment companies are not seeing significant growth in the subscriber base for streaming, and they’re now focused on getting streaming to profitability. More consolidation is expected to happen! To cope with the rising costs of creating and maintaining content, streamers need to secure subscriptions and sell viewership against ads. It has changed from great shows that cater to small audiences to increasing the global reach and securing more eyeballs for commercials.”
Alejandro Cirulnik, VP of Delivery, Globant
Migration to the cloud: the need for connectivity, load-balancing strategies, and scalability
One of the foremost advantages of the cloud in the media and entertainment industry is scalability. It enables companies to expand their digital infrastructure effortlessly to handle high-demand periods such as premieres or live-streaming events. As a result, users can watch their favorite content with crystal clear images and without delays. Simply put, the cloud reduces streaming latency.
This elasticity enhances performance and reduces operational costs, as organizations only pay for the resources they use. Additionally, cloud solutions facilitate seamless collaboration among globally dispersed teams, fostering efficient content creation and distribution. The cloud’s robust storage capabilities ensure secure and easily accessible archives for vast media libraries, enabling quick retrieval and editing of assets. Moreover, real-time data analytics and AI-driven insights empower decision-makers with actionable intelligence, leading to informed content strategies.
Between 2019 and 2025, a 3.0 X increase in the required digital storage capacity used in the entertainment industry is expected.
“Content production companies like Disney and Warner Brothers are moving into the cloud. We should provide tools that enable content companies to move into the cloud so that you can edit a character or a video from anywhere in the world. Their strategy is to go back to basics; you are great at making content; let us do the technology. Disney and other companies are becoming increasingly technology companies. For example, we have a partnership with Intel aiming to optimize cloud usage and achieve operational efficiency.”
Pablo Peranzola – Global VP of Technology at Globant
The future of AI in Media and Entertainment
Artificial Intelligence (AI) has permeated nearly every aspect of our lives, revolutionizing industries. One such sector where AI has made a significant impact is the media and entertainment industry. From personalized content recommendations to cutting-edge visual effects, AI has transformed how we consume and interact with entertainment.
Gone are the days of aimlessly scrolling through content libraries to find something of interest. AI-powered recommendation engines have become ubiquitous in media streaming platforms, providing users with personalized content suggestions based on their viewing habits, preferences, and historical data. Leveraging machine learning algorithms, these platforms can accurately predict what a viewer might want to watch next, leading to increased user satisfaction and prolonged viewing sessions.
Also, AI can lower client acquisition costs by up to 50% and improve marketing initiatives by eliminating outdated or ineffective data.
“AI can help with audience subscriber and viewership acquisition, maintenance, and continuity. That’s one of the main things AI can provide: a way to monetize the data coming in, manage those subscribers, and gain more subscribers.”
Senn Moses, Managing Director, Media & Entertainment Studio, at Globant
As the pace of technological change continues, companies must pay attention to the tools and solutions transforming how we create and consume stories. With an eye on the future, Globant continues to help businesses take full advantage of the digital revolution. Join this transformation and learn more about what lies ahead of the media and entertainment sector.