The pandemic pushed industries to transform and adapt, particularly in the media and entertainment industry. Consumer habits are increasingly digitized, and the engagement, production, and distribution process keeps adjusting.
Statista claims the total revenue of the entertainment industry worldwide “is expected to show an annual growth rate (CAGR 2022-2026) of 7.41%, resulting in a projected market volume of USD 40.74bn by 2026.” With shifts in the world economy, consumer preferences, and the rapid evolution of technology, the industry and all its surrounding businesses will encounter unseen challenges and surprises. So, what can we expect?
We went to our Globers for answers. According to Senn Moses, Managing Director, M&E Studio, Luciano Escudero, VP of Media Engineering, and Alejandro Cirulnik, VP of Delivery, at Globant, the following trends will help define the media and entertainment landscape.
- The magic word is content.
Video streaming (SVoD) revenue is expected to reach over $139 billion annually by 2027. Original, new, and exclusive content will continue to drive audience behavior and retention. Audiences will continue to tune in for “must-see” events and relevant productions, subscribe to a particular network or app for their unique programming and follow their patterns as long as the content continues to be compelling. Companies are beginning to use live-streaming technology to broadcast their products and services.
Apple, Hulu, Netflix, Disney, and Amazon spend billions of dollars annually to help ensure strong subscriber acquisition and retention and healthy box-office attendance. One example is Amazon’s recent purchase of MGM Studios’ and its famous content library, plus the multi-billion dollar acquisition of the air rights for Thursday night football in the U.S., focusing on attracting unique viewers for exclusive events. In 2023, they will continue to evolve, as we have seen in the case of Netflix expanding into the gaming sphere or Disney using its deep back catalog to attract new Disney+ subscribers and producing new content such as The Mandalorian.
The surge of streamable content will keep its presence in the media and entertainment scene, as seen with Crunchyroll, a streaming service with original content and popular anime, with a steady growth that has reached over 4 million paying subscribers.
Different technologies will combine to deliver a new way of immersive storytelling and offer the opportunity to experience the content differently. According to Danny Kaye, Media and Entertainment Strategic Advisor at Globant, “It’s possible that films or TV shows could immerse viewers by letting them choose which story arcs will play out, and technology offers other possibilities. One example was the first truly immersive storytelling VR experience we produced at FOX with the film The Martian.”
- We are entering the gaming economy.
Modern gaming is introducing a new era of entertainment, disrupting the assumptions of how audiences participate in the story. Across the global media landscape, from simple mobile games to massive multiplayer services and rich, hyper-realistic narrative game worlds are influencing or replacing every other form of entertainment (such as motion pictures) as a potent influence on the culture around the globe. Mordor Intelligence predicts the worldwide gaming market will be worth $314.4 billion by 2027, versus 173.7 billion in 2021, showing a compound annual growth rate (CAGR) of 9.64% between 2022 and 2027.
“Stories from video games are becoming a recurring feature on the film and TV scenes alike, and the reception has never been better nor more significant as a trend in the future of entertainment.” The video game reach has permeated the scripts of more than 25 feature-length films, for example, The Super Mario Bros. Movie, Sonic the Hedgehog 3, and Minecraft: The Movie). It is also leading to 30 TV adaptations in HBO Max (The Last of Us), Amazon Prime (Fallout), Peacock (Twisted Metal), and Netflix (Horizon Zero Dawn, and Castlevania to The Witcher), with more in development. It’s no surprise that Joe Russo, the director of Avengers: Endgame, believes gaming will dominate the future of storytelling, going as far as to say that “the revolution comes from the gaming side because that’s where the technology is.”
Massive gaming growth has set a new standard, changing how people consume entertainment by transforming stories and delivering four key elements that audiences now expect.
1) Immersion: Engaging with the story is all-encompassing, and the audience is genuinely part of it. Content developers now have to build stories with future immersion opportunities in mind.
2) Agency: Gaming has introduced an expectation that you can influence the outcome as part of the story. Content now must be elastic and allow for extreme personalization and viewer involvement.
3) Community: Content must produce entryways for viewers to join the self-selecting fanbase and have direct communication, considering how to engage fanbases and provide digital and immediate opportunities for connection.
4) Culture: Content must resonate and create an echo-like effect across multiple formats to become part of the culture.
These new aspects are informed, elevated, and integrated through breakthrough technologies such as Virtual Reality (VR) and Augmented Reality (AR). The presence of VR and AR in the market driving gaming tech will increase. Famous technology events like E3 and BlizzCon already use VR to showcase their new games. Luciano Escudero adds that the other factor that is affecting technology is how to do immersive experiences culturally and be a good fit for the way we wear technology in our bodies:
“Today, we are not getting there, today, there are so many devices that we can use for a specific time without actually causing effects on our bodies, and also, we are not powerful enough to process everything immersive in the way we should expect it.”
Last but not least, cloud gaming will gain steam, as the interest in “cloud gaming” has grown by 400% in the previous five years, presenting a new advantage for gamers: using the latest hardware without investing in it.
“Gaming is one of the most engaging entertainment activities…, ahead of Live TV, Streaming TV, and Streaming Video, and only sits behind Social Media…(it) has become inseparable from the enjoyment of day-to-day life… (a)part of a carefully curated and enriched entertainment experience…an open dialogue between the community, the creators, and all things additive. It’s a rewarding, immersive experience that is second to none.”
- Sports are hitting the target.
Another critical pillar this year is professional sports, as they continue to provide original, unpredictable, compelling, and time-sensitive content to audiences across the globe. As a result, they are the path to ensuring spikes in subscriptions, viewership, and ad revenues. Based on 2022 data, sports streaming will be in high demand in 2023; hence Amazon and Apple are securing major sports streaming deals.
Sports offer unique content that tells an unpredictable storyline in real-time. Streaming services are turning to live sports to attract advertisers, attract new subscribers, and retain customers. The carrier with exclusive rights to broadcast specific content and all the analytics, lead-in, and post-game commentary will secure viewership, ad revenues, and subscription spikes. One of the challenges they can face is the fragmentation of rights across even more platforms, making it more difficult for fans to access programming while also creating added cost and complexity.
According to Alejandro Cirlunik, “Sports streaming is a social experience, so we are already seeing companies investing heavily into second screen options, continuous technological advancements enable fans to consume sports across devices and integrate augmented reality, virtual reality, social media, and gambling, into the viewing experience.”
Offering engagement incremental to viewing from sports wagering, daily content feeds, and interconnecting through sports-themed video games and metaverse options will deepen the bond between sports offerings and their viewership. Even the very definition of ‘what is a sport’ will continue to be challenged in 2023 as eSports, eSports viewership, and live event attendance continue to rise.
For the esports audiences, engagement is underlined through a second screen, as 97% of esports viewers watch a form of television with another device in their hand. These mechanisms will shape the new sports fan, its interactions, engagement, and all essential experiences in sports consumption, enhancing it including “sports team apps, score prediction challenges, fan leaderboards, real-time polls, sports betting, and event feeds to combining physical activity and gameplay.”
Listen to how smart venues will transform sports in this Unscripted Tech podcast episode by Globant.
- Letting the data speak for itself.
Data, analytics, and AI will be critical to the media and entertainment industry trends in 2023. Its use will enable the ability to predict audience behavior and expectations and aggregate, understand, analyze, dissect, and anticipate needs, preferences, and desires. It will strengthen decision-making for the entertainment business, participants, and creators and grant them the tools to improve and adapt faster, more accurately, and efficiently.
Those entertainment players who focus on increasing their analysis of consumer data will be able to monetize this most effectively. “…big data analytics has helped media companies to connect with the audience directly through scheduled media streaming and maximize profits…(And) helped identify the exact content customers would want to engage with on a scheduled basis.”
Fortunately, consumer data is much better understood today than in past years, enabling a more accurate and measurable targeting success like audience engagement rate and consumer insights. However, even though data and AI can serve as a way to connect more effectively with audiences, today, the media and entertainment sector faces more considerable challenges than in the past. The industry is growing faster than ever, and companies are finding it hard to keep up, as customers’ habits are highly fragmented. There’s higher pressure to lower costs but improve revenues.
“TV, radio, online, and print media are moving to a multi-dimensional user experience including streaming videos, avatars, social media, and reels. Technology like augmented reality and VR…engineering multiplying the touch points… but also digital twins and what does that mean for many companies.”-Fabien Rossini, Strategy consultant, and co-leader of the Metaverse Studio in EMEA at Globant
Due to the shift of media platforms to online mediums and the rapid adoption of digital technologies, media companies can access new data sources. However, they must fight harder to stay relevant in a highly competitive sphere. In fact, by 2023, there’s an estimation that mobile consumption will account for 35% of all media consumption.
Discover how to become a key player in the ever-changing media and entertainment industry through technological innovation and critical customer insights. Globant offers practical solutions that create, manage, deliver, and monetize content.
For more information about trends in media and entertainment, watch our Converge sessions How video games disrupted storytelling across all media and The gaming industry’s role in building the metaverse.