What Are the Current Trends in Media and Entertainment Sector In 2022?

By Ruchir C.

The Global Media & Entertainment Team of the International Trade Administration is committed to supporting US M&E clients by licensing and trade services that allow them to expand internationally. Our team has over 100 US offices and 80 Embassies. In addition, we offer international business development and creative sector connections to help you expand your digital business and sell and protect your Intellectual Property abroad.

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Ben Swinburne of Morgan Stanley's US Media Research Group says that 70% of these companies should experience revenue growth of 10% or more in 2022. However, while demand strength is generally present across all 25 companies in our coverage, it's difficult to translate that strength into earnings growth.

Multiple segments make up the Media and Entertainment industry (M&E). These include movies/cinema, television, music, publishing, radio, advertising, and gaming. Trends and drivers for each segment vary between sub-segments and geographies. This makes the vertical unique as these sub-verticals can compete, complement, and combine to meet the global demand for entertainment, information, and other services.

Trends in Media and Entertainment Sector

Technology is driving the media and entertainment industries. Technology is driving everything, from cutting-edge special effects developed for movies and then adopted by other industries to streaming media, virtual reality gaming, and new delivery channels.

People preferred stay-at-home entertainment over theater-going and live events. Hence, the pandemic was a turning point for streaming media. What media and entertainment solutions will profit from this shift now that many people are willing to leave the couch?

D2C Video Streaming

The media industry has witnessed an increase in global lockdowns since its introduction. This is because users found it essential to access premium video content during that time. This has led to a decline in US pay-per-view TV subscriptions but increased overall digital video consumption.

To offer many options, Over-the-Top intervened. Hulu, Netflix, and Amazon Prime are just a few examples of OTT platforms. All of them offer cross-platform compatibility, which is important for modern consumers. Today's audience prefers to watch videos on multiple devices and platforms. Another outcome is streaming warfare.

D2C stands for direct-to-consumer marketing. This strategy means a company sells products or services directly to customers. This allows the manufacturer to control its marketing and sales strategies. Here's how D2C video sharing portals and streaming works regarding future trends in media and entertainment.

Take Disney as an example. After Disney+, one major business initiative decided to rescind Netflix content and make it available in D2C via Disney+. This company was a pioneering force in D2C video streaming. This was when major media companies began to remove content from Netflix and offer it in the D2C channel via one of its major business projects, Disney+.

Augmented Reality and Virtual Reality as the Top Digital Media Industry Trends

It is absurd to ignore augmented and virtual reality when it comes to digital media trends. As a result, AR and VR content has dominated the entertainment and media industries. Both enhance the relationships between content creators and viewers and are beneficial. As a result, today's consumers can navigate a world with blurred boundaries between the digital and physical realms.

Because of the cost reduction, these two technologies have been around for many years. Celebrities and artists know that keeping in touch with their fans is crucial. Unfortunately, in the age of COVID-19, it is still difficult to distribute new releases.

Musicians can use VR entertainment content to bridge the gap between them and the consequences of the pandemic. It also allows its followers to access live entertainment events canceled due to social distancing. Virtual and augmented worlds have made it possible to strengthen the connection between artists, their fans, and their followers.

Pokémon Go is one example of these trends working together. Social networks claim that virtual and augmented reality offer affordability and mobility. Experiences with AR and VR entertainment software are more important than ever. Optimizing VR and AR content for different devices is essential.

Artificial Intelligence

Artificial intelligence (AI) will continue to impact the media industry significantly. Its three most important functions within this industry will be voice recognition, recommendation, and media automation. Every provider has invested in recommendation technology since the advent of Netflix, and streaming media have changed how we discover and consume entertainment media. This allows them to efficiently and accurately share content with the right audiences. Netflix claims that 80% of its content is delivered through recommendation technology. It and all other streaming services will continue to compete for this title in 2022.

Artificial intelligence is a new trend in media. It affects TV, VFX, and radio. Most entertainment companies have a large unstructured digital data collection that can be organized using AI tools. Natural language processing, machine learning, artificial intelligence, and machine learning are all equally effective in predicting content user engagement.

M&E companies have a large repository of unstructured user digital data. Artificial intelligence has given the mining and filling of this digital data a human-like dimension.

AI can quickly estimate and retrieve emotional changes. This information is essential to understand better customer behavior, digital media consumption trends, and other relevant data. In addition, this data allows for personalized recommendations about how content can be improved.

Many streaming apps use AI technology and smart machine-learning algorithms to offer high-quality streaming music, audio podcasts, videos, and audio podcasts that their users will enjoy.

AI tech innovations aid in classifying digital data according to mutual features. This allows companies to predict user engagement and improve their monetization potential. For example, Spotify uses different AI methods to recommend new music for users that they eventually love. Because of Big Data's rapid expansion and the complexity of new algorithms, these recommendations will become more precise.

Numerous statistics gathered by research centers and magazines show that AI-driven entertainment has many benefits for media conglomerates.

Numerous statistics gathered by research centers and magazines show that AI-driven entertainment has many benefits for media conglomerates.

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Content Distribution gets (more) Complex

As we enter 2022, investment in original content is not slowing down. Content drives consumer interest across all platforms, including streaming, broadcast, and cable networks. However, deciding how the content will reach consumers is often difficult.

In the next year, the direct-to-consumer pivot will remain the main strategic priority of the industry. Investors and operators focus on subscriber growth as a key performance indicator for services with low switching costs. Despite rapid growth in the past two years, many D2C services provided by media companies are still unprofitable. They consume cash and drain resources from the enterprise.

Streaming is capital-intensive, highlighting the importance of media companies to reap the financial benefits of the linear ecosystem. While cord-cutting is slowly reducing the number of traditional video subscriptions available, cable and broadcast networks are still cash flow engines. As a result, network owners must ensure that they continue to provide new content to their linear channels, including sports, to avoid a dislocated unwinding of the legacy pay-tv environment, valuable subscriber fees, and advertising revenue.

Podcasts are the Modern Radio

By 2022, podcasts will be listened to by 140 million people. This is just the United States. This number is expected to reach 164 million by 2023. Every day, more amateur podcasts emerge. There are more than 2,000,000 podcasts. The sector is also becoming more professional. As a result, podcasting is becoming a profitable business strategy.

Podcasts that are branded can be used to market the format as well as for entertainment. Podcast networks are also creating and buying new programs in an unprecedented way. In addition, some have connections to famous TV series and current events.

Cloud Gaming Is Gaining Popularity

Over the past five years, searches for "cloud gaming" have increased by 192%. 2018 saw several product launches and connected acquisitions that made headlines. In addition, the search phrase has seen a significant increase in popularity since 2020.

The gaming industry is experiencing many entertainment trends at the moment. The Xbox Series X (PS5 and Xbox Series X) was launched in November 2020. Virtual reality and augmented reality are rapidly becoming a part of gaming technology. In addition, Esports and mobile gaming are becoming more popular than ever.

Cloud gaming may be the biggest entertainment trend for 2022. Global gaming is estimated at 3.2 billion. Unfortunately, only a tiny percentage of these people have the hardware necessary to play the most difficult and recent games. Cloud gaming solves this problem by streaming video games to your device via remote servers. Your computer, phone, or smart television doesn't do the heavy lifting.

NFTs Have Entered the Media Chat

NFTs are gaining popularity as a way for media companies and their IP to increase engagement and could be a future monetization model.

Early adopters are buying NFTs that link to sports, art, and collectibles and are acquiring unique digital assets that can be traded and whose ownership is recorded using blockchain technology.

Media companies have formed relationships with NFT technical experts and marketplaces to create offerings that allow consumers to interact with their favorite characters, TV shows, and other content. NFTs, enable media companies to establish cross-platform consumer interaction anchored in proven IP. They also allow them to expand their consumer relationships into new digital areas.

The media and entertainment industries will be experimenting with NFT in 2022. However, these efforts have a low economic return. NFT investments in media and entertainment are primarily marketing investments that aim to drive engagement and access to fans, especially crypto-activists, who want to strengthen their connection with popular content. Media companies may be able to generate royalty income from secondary sales of NFTs, possibly in transactions related to activities in the metaverse.

Artists are now turning to NFTs that use blockchain technology to protect their work. The digital ledger is indestructible, so it gives the author sense of security. In addition, NFTs can be purchased on marketplaces as music, paintings, or any other digital item that customers wish to own individually. As a result, artists can build close relationships with their fans while making a handsome profit from digital memorabilia sales.

These digital assets can also be traded as they were held primarily by a known figure. This provides market legitimacy and allows for exchange. Musicians can also use NFTs as concert tickets and sell them through ticket booking portals. The smart contract ensures that the key is authentic and is delivered digitally to the customer.

Podcasting for a Global Audience

Podcasting is now more than a hobby. Popular media companies are also using podcasting as a marketing strategy. This innovative solution uses the power of audio material in the form of interviews to spread the word. This is possible with very basic requirements. Today's customers expect ad-free entertainment.

They also prefer audio-based formats due to screen fatigue. With their innovative approach, podcasts proved to be a good solution in this situation. They allow companies and influencers the opportunity to build ties with their listeners to help them with sponsorships and brand recognition.

Podcasts are becoming increasingly popular because of their simplicity and ability to be downloaded onto consumer devices for a low cost. As a result, Grand View Research predicts that the podcasting industry will grow at 31% per annum through 2028. This means that creators will have a simpler time reaching their audience via platforms or individually.

Simplified and Customized Experiences Take Center Stage

Consumers will continue to look for unique experiences and easy access to entertainment content in 2022. Companies that can solve the discoverability puzzle to aggregate content in an intuitive and more accessible manner will be at the top of the list.

Customers expect seamless interactions from the beginning of their customer journey to billing and usage. As a result, we will see more companies joining the streaming value chain. To improve the user experience, network owners, broadband providers, and connected TV manufacturers will take steps to simplify, optimize, and integrate layers and compatibility tools across platforms.

Consumers are finding it increasingly difficult to find content as they move between streaming services looking for new series or old favorites amongst the vast array of programming. Companies that can harness valuable viewership data and offer customers more content will be competitive. Streamers still playing catch-up will improve their recommendation engines using subscriber preferences and history. They will also tailor their marketing to ensure that consumers know all available viewing options.

Bundling can improve the customer experience. For example, scaled digital-native streamers offer their subscribers a range of integrated services, including gaming, shopping, and devices. In addition, media companies that have diversified businesses or are in innovative partnerships with third parties (e.g., non-fungible tokens or NFTs) will create their own "flywheels" to offer a range of services to their subscribers. This will drive new sign-ups, increase stickiness to D2C revenue models, and extend the customer relationship.

The streaming industry needs a wide range of programming. As a result, media companies must provide a seamless experience for subscribers in an environment characterized by consumers trying to manage a wide range of services and low switching costs.

Revenue Earned Through Media and Entertainment Sector

America's media and entertainment industry represents approximately a third of global entertainment. It is estimated to have a value of $717 billion US Dollars annually. This is due to many entertainment and media sectors, including streaming content and television programs, commercials and music, broadcast, radio, book publishing, and video games. It also reflects the rapid growth of sectors such as e-sports which made $281 million in 2019, more than twice its 2016 revenue.

By 2025, the world's entertainment- and media sector revenues are expected to reach more than $2.5 trillion. With a CAGR of 5% in the next four years, the UK will become one of the largest national markets in the world.

PwC, a Big Four professional services firm, has released a new study that shows the entertainment and media sector (E&M) is poised to rebound quickly from the effects of the pandemic. Revenue fell by -3.8% year-on-year in 2020. This $81 billion recession exceeded the 2020 music, radio, and podcasts segment.

PwC predicts that as more countries emerge from the lockdown and experience increasing vaccination rates, there will be a 6.5% year-on-year increase in vaccine demand in 2021 and an additional 6.7% in 2022. This will allow for the rapid recovery of lost value. It will also help drive global E&M revenues to rise at a 5.0% five-year CAGR. As a result, E&M revenues will reach an estimated $2.5 trillion by 2025.

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Conclusion

While there is uncertainty about the future, three things are certain to drive disruption in media and entertainment: a dynamic competitive landscape, technological change, and shifting customer expectations. As a result, media and entertainment companies can prioritize three levers of action to address their short-term problems while also preparing for long-term value creation.

Brands communicate with customers via live streaming apps. Anyone can live stream using their smartphone via social media channels or live streaming platforms. Live streaming isn't just for millennials. Over 59% of senior executives prefer watching a video to reading text-based content. Brands can make it easy for senior employees and team leaders to exchange information via live streaming.

Live streaming offers endless business opportunities, as you can see. Live streaming is a great way to expand your business. Most businesses already have the skills and resources necessary. Do you use live streaming in your company? Are you familiar with the benefits of live streaming?

Idea2App predicts that videos will account for 82% of all internet traffic by 2021. In addition, live video will account for 13% of internet video traffic in 2021.

It is possible to see a future in which live streaming video will be the main mode of communication across the globe. Live streaming videos will have the greatest impact on collaboration, marketing products, and providing services. It will be a way to have a real human conversation with every brand and product. This will allow people to communicate with each other even though they are physically separated.

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