• Robles Flood posted an update 2 months, 2 weeks ago

    In 2022, media and entertainment companies will experience a familiar landscape influenced by consumer behavior dynamism, technological innovation, competitive intensity, and industry reshaping. Add the results of the pandemic on business conditions and also the workforce, an inflationary economy, along with a charged social and political landscape, and company leaders are steering through unpredictable terrain. Allow me to share five trends to look at in ahead because industry activly works to reframe its future.

    1. Content distribution gets (more) complex

    Investment in new original content shows no sign of slowing as we move into 2022. Content articles are the fuel that drives consumer interest and engagement across platforms – streaming, broadcast and cable networks. How the content reaches consumers, however, frequently involves an elaborate decision-making process.

    The direct-to-consumer (D2C) pivot will continue to be the key strategic priority for your industry inside the coming year. Operators and investors alike are focused on subscriber growth and retention as the key performance indicators for services where switching costs for consumers are minimal. Despite their rapid growth over the past 2 yrs, most D2C services operated by media companies remain unprofitable and consume cash, devouring resources in the overall enterprise.

    The capital intensity associated with streaming highlights the value for media companies to harvest the financial benefits of the linear ecosystem. Whilst cord cutting gradually shrinks the universe of traditional video subscriptions, broadcast and cable networks remain cash flow engines. 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 keep viewers engaged.

    That year ahead, operators (in particular those minus the scale or capital resources to look truly “all in” on streaming today) will probably be faced with challenging decisions around programming their streaming platforms they are driving growth, while also remaining profitable but structurally declining linear businesses to build earnings. This is the tricky joggling act.

    Acting on these decisions will need sophisticated modeling and disciplined business planning that spans creative and executive priorities to offer the optimal combination of growth and financial outcomes.

    2. Simplified and customized experiences take center stage

    In 2022, consumers continually find unique experiences and ubiquitous access to entertainment content. Businesses that solve the discoverability puzzle and aggregate content inside a more intuitive and accessible way will rise to the top.

    Consumers expect effortless interactions during the entire end-to-end customer journey, from sign-up to usage and billing. Accordingly, we will have more companies doing the streaming value chain. Network owners, broadband providers and connected TV manufacturers is going to be doing their best to simplify, optimize and integrate layers and compatibility tools across platforms to boost the consumer experience.

    Content discovery has become increasingly difficult for consumers while they bounce between streaming services searching for new series and old hits one of the avalanche of available programming. Tech-savvy companies that harness valuable viewership data to give customers numerous content they desire will love a competitive advantage. In 2022, streamers playing catch-up will refine their recommendation engines depending on demonstrated subscriber preferences and usage history, and tailor their marketing – in-platform and over external channels – to create consumers alert to all the viewing options.

    Bundling also can increase the buyer experience. The scaled digital-native streamers give a variety of integrated offerings with their video subscribers – shopping, gaming, devices, as well as other digital services. Media companies with diversified businesses or innovative partnerships with any other companies – including from the digital asset arena (e.g., non-fungible tokens, or NFTs) – will make an effort to create their very own “flywheels” that offer a portfolio of offerings on their streaming subscribers, driving new sign-ups and adding stickiness towards the D2C revenue model, extending the life in the customer relationship.

    A deep lineup of desirable programming is table stakes to the streaming game. Within an environment where individuals are juggling an evergrowing number of services and switching prices are low, media companies should deliver an experience that keeps subscribers connected and engaged.

    3. Movie night will return to the theatre

    The end results in the pandemic on the movie business have been severe. Cinema owners struggled to be open as moviegoers stayed away as a result of virus concerns and limited use of fresh film product. As the emergence from the Omicron COVID-19 variant is adding uncertainty, there are signals pointing with a constructive path forward for the box office in 2022.

    In 2021, 13 films grossed over $100 million based on Box Office Mojo, down from over 30 in 2019. Nonetheless, brings about 2021 indicated the perfect audience appetite for “blockbuster” features as reopening across the nation gained steam, prompted simply by the distribution of effective vaccines. Looking ahead, a substantial slate of long-anticipated tentpole movies will help drive the recovery in theatre admissions.

    A big change that can hold in 2022 could be the abbreviation from the exclusive theatrical window to approximately 45 days and, for a lot of mid-size films, a day-and-date release approach that allows consumers to view new movies in the theatre or at home. Following a difficult number of negotiations between theatres and studios, the show industry appears to have aligned while on an approach that preserves the highlights of the theatrical window while acknowledging a realistic look at streaming popularity.

    The shorter first-run window allows studios and theatres (and inventive talent) to make use of successful major releases – namely the enormous ticket sales that take place on opening weekend along with the following weeks, as well as 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 being a vehicle for media companies to expand engagement making use of their content and IP and may give you a future monetization model as the market matures.

    Early adopters are getting NFTs connected to sports, art, collectibles plus more, acquiring one-of-a-kind digital assets that are easily tradable and whose ownership and authenticity are recorded via blockchain technology.

    To become listed on encounter, media companies are forming relationships with NFT technical specialists and marketplaces to formulate offerings which allow customers to be involved in a completely new way using their superheroes, movie and television show scenes and other content. NFTs allow media industry players to generate cross-platform consumer interactivity anchored in proven IP and also to build new communities by extending the individual relationship into emerging digital areas.

    In 2022, the press and entertainment industry will undertake a good amount of NFT innovation and experimentation. The economic return of these efforts is unclear; today, NFT projects in the media and entertainment space are essentially marketing investments designed to power engagement and access fans – especially those active in crypto – eager to deepen their association with popular content. Later on, media companies could generate royalty income in connection with secondary sales of NFTs… perhaps in transactions associated with activities taking place inside the metaverse.

    5. M&A remains a favorite item about the menu

    Throughout the last Twelve months, the media and entertainment industry saw the greatest players execute with a variety of transactions – landscape-shifting megamergers, bolt-on acquisitions of smaller studios including properties situated in international markets that produce localized content, targeted deals for niche IP assets that could be leveraged to generate fresh programming, and innovative joint ventures designed to accelerate global streaming growth on the capital-efficient basis.

    In 2022, the consolidation of studios and networks continue as companies attempt to build the content, capabilities and scale needed to battle the digital-native behemoths who make use of 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 achieve ambitious efficiency goals. Cost savings realized through integration will fund future growth investment and boost profits, a key objective because industry transitions in the stable, high-margin linear world to a streaming ecosystem that drives less-profitable revenue (for the time being).

    Robust conditions privately and public capital financial markets are enabling companies to trade non-core businesses as well as other corporate assets that no longer fit their evolving growth strategies or capital allocation priorities. Accordingly, asset divestitures will be a key trend in 2022 too. Activist investors will play a job in certain of these transactions, serving as another catalyst for change.

    The press and entertainment industry happens to be a whirlwind of strategic activity as companies build, renovate and dismantle business portfolios as a result of market developments, and 2022 will not be any different. These five trends indicate how the media marketplace is poised for another year of exciting change, as companies drive innovation, tackle new challenges and capture opportunities to position themselves for growth.

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