The Content Creation, Consumption Shift Continues

The Content Creation, Consumption Shift Continues

Andy Marken August 9, 2024

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Philanthropy isn't tossing a bone to a hungry dog; it's sharing when you are just as hungry. - Necia, Winter Sleep, Adopt Films, 2014

The media and entertainment industry are doing great, good, bad or suck depending on which segment(s) of the industry you're in. Even then it's complicated.

We like to streamline the discussion to the entertainment segment.

You know, four categories movies/cinema, TV (pay/streaming), gaming and social stuff.

According to analysts, the industry will do about $1.6T this year, up slightly from last year but probably due to global inflation and entertainment price increases rather than real growth.

Folks who forecast instead of create, say that by 2027 revenues will hit about $2T and that the global and industry economies will be about the same at three percent per anum.

That's interesting but it doesn't mean squat if your segment of the industry is healthy; and more specifically, if you have your solid projects lined up for as far out as you can see or you're solid in your job.

Just remember, it's a matter of perspective it's a recession when your neighbor is unemployed and it's a depression when you're unemployed. The industry has been destructing and constructing itself for about 10 years as Wall Street pushes and bosses try new business models with new technologies and avenues to win consumers who are presented with even more options.

Yesteryear's entertainment leaders - theaters/TV - are trying to fit into the new ecosystem but the double whammy of the global pandemic and dual strikes in the Americas hurt everyone.

The Americas account for 40 percent of the global entertainment production/consumption market.

Slipped - Theater attendance continues to be off from the 2019 peak for a multitude of reasons, including the volume of excellent content available to people at home from broadcasters and streamers.

While North American has historically been the leading global box office market, China and other Asian markets have become increasingly important to the theatrical industry in recent years.

Prior to the pandemic, theater ticket sales accounted for a large portion of the studio industry's revenues and were the main source of income for movie theaters.

Today, studios have more distribution options.

The Americas production and box office numbers will rebound but at a slower pace with more selective production in the Americas and with smaller creative teams.

Expensive, glitzy superhero films have lost their luster with the younger audience so, major studios are shelving and putting projects on hold until and when (if) the ticket-buying public returns.

Theater operators will have to be more aggressive in reaching out to studios to schedule a broader range of local and international titles in addition to pursuing the latest increase of interest - beyond trophy popcorn boxes -from Gen Alpha/Z consumers past and present concert films.

Produce/Consume - Increasingly, people in the Asia Pacific are turning to locally created movies/shows rather than relying on projects produced in the Americas.

The Asia Pacific region is experiencing the greatest growth in production and theater attendance with South Korean, Japanese, Bollywood and Chinawood (Hengdian World Studios) delivering more content and attracting more ticket sales.

The home/personal entertainment market reminds us of the demolition derbies our dad would take us to back in the day.

Source - reflightest

Everyone is determined to win.

The problem is people only have 24 hours in a day and we'll be brutally honest entertainment isn't a top priority.

Despite that fact, nearly everyone in the home/personal entertainment industry is focused on getting a big piece of that time.

No one in the traditional TV arena took much notice of the red envelope folks in Los Gatos who decided they were going to bypass the post office and feed content directly to their customers.

OK., truth be told, they laughed their a**es off and so did the DVD rental folks around town.

Studios/broadcasters were even willing to help them speed their demise by licensing them their retired shows/movies.

New First Choice - Consumers are quickly turning away from large, overpriced payTV home entertainment options and moving to the more economic, more flexible streaming video choices.

While traditional TV viewing is declining, streaming content on TV, computers and mobile devices have risen to more than 3hrs 30min.

If your household is like many - okay ours - everyone is together but enjoying their version of personal entertainment.

With the advent of streaming, the long-lasting, highly profitable linear/pay TV model has suffered.

The day of all of your entertainment in one tidy (expensive) bundle is shrinking and projected to fall to about $15B annually by 2027, compared to last year's $195B.

Consumers have come to realize that the limitless number of viewing choices is too expensive especially when:

You only watch 3-4 channels with any regularity

There is now a mind-numbing number of premium streaming video services available

The traditional MVPDs (multichannel video programming distributors) - i.e., Comcast and Charter - are seeing their subscription base continue to shrink.

Subscriber desertion will become even more severe in coming years as sports migrate to OTT platforms that are willing to play the long game when it comes to growing their subscription bases.

The cost for Pay TV services doesn't make economic sense especially when their retransmission costs have increased 10X in the same number of years.

PayTV services will have to be more creative, more flexible if they are to survive/thrive in the rapidly changing mar

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