The entertainment industry is changing to conform with new realities, and those changes bring new challenges and opportunities for investors and entrepreneurs in the industry.
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This year has been a very impactful year for businesses in every industry, and the entertainment industry is no exception. With theaters closing their doors, film sets going on indefinite delays, and halls, stadiums and other event centers staying under lock and key, it’s safe to say that no sector of the entertainment industry has been left unscathed.
The good news, however, is that just as other industries are finding ways to return to a semblance of normality or innovating new approaches to continue operations, the entertainment industry also has prospects for the future. Here are some of the most important ways the entertainment industry could change going forward.
Many aspects of the entertainment industry relied on physical attendance at events to bring in the profits. This included movie theatres and concerts, which brought in the most amount of money for many actors and musicians respectively. Now, those events have become difficult to organize because of the various restrictions on public gatherings and movement from place to place internationally and even within countries.
The approach many players in those sectors have taken is to begin to push their focus toward streaming. ‘Over-the-top” video content is becoming the most important way that people watch movies nowadays. OTT video revenue for media and entertainment (think: HBO Go, Hulu, Netflix) in the U.S. reached $20.1 billion in 2017, up 15.2 percent over the preceding year. PwC predicts that growth rates will begin to slow as the market matures, but revenue in this area is expected to reach $30.6 billion in 2022. Since the advent of Instagram Live concerts, many artists are now prioritizing digital concerts to engage their fans and get their earnings back on track. Even stand-up-comedy, which is an activity that few people would have thought could exist without an audience, is being performed via Zoom and other video-conferencing platforms.
Production and creativity
Across various industries, there has been a commitment by participants to democratize access and promote inclusivity to enable any interested person to access the tools necessary to achieve success. The entertainment industry is far ahead on that curve, as seen in digital platforms like YouTube that allow actors, singers, and other entertainers to showcase their talents while bypassing the traditional gatekeepers.
In addition, many services have been established to give performers the opportunity to hire staff such as producers, songwriters, and voiceover artists on the cheap, or to even buy products like ghost-produced songs that they can use without any restrictions. According to Enrique Lozano Donate, Cofounder of Edmwarriors, “The way in which music is created, produced and edited is becoming an increasingly commercialized process, and this is causing that nowadays you can acquire a song and all its rights at a single click. These changes are making it easier for people to be breakout stars even without the support of the traditional institutions of the E & M industry.”
This change can also be seen in crowdfunding, with Kickstarter and other crowdfunding platforms raising millions to support entertainment projects (up to 20 percent of all their projects). The amount raised by the biggest crowdfunded film (so far), Veronica Mars, was $5.7 million.
There are many people who still swear by their TVs and are committed to making it a date with their favorite TV hosts every day, but those people are beginning to be few and far between. The shift toward digital has been happening for a while but the events of this year have only served to accelerate it. In 2018, the number of TV viewers fell significantly to less than 300 million. At the same time, the number of OTT viewers grew to 198 million. Likewise, the amount of media ad expenditure that was going to TV fell 2 percent, largely due to a shift in focus by advertisers to digital video channels.
The shift to digital consumption is likely to be fuelled to an even faster acceleration by the deployment of 5G networks across the world. The increased reliance on smartphones is also another factor that is likely to have the same effect. In 2012, the time spent on mobile engaging with media was 1.6 hours a day. In 2018, that number had more than doubled to 3.3 hours a day. The combination of these technologies enables people to consume on-demand content with such ease and such high quality that they will unlikely be willing to return to traditional TV or radio programming. The production of media will certainly follow suit, to offer the flexibility that consumers have come to expect as a standard.