A continued transformation in the media and entertainment space in 2019, with growing mobile consumption, increased demand for direct-to-consumer and OTT offerings, and the rise of user-generated content driving the industry forward is on the cards.
Media and entertainment is a fast-moving landscape. As the industry heads into 2019, what is there in terms of digital transformation trends in the industry is truly reflected in the trends of media consumption. People want content on demand—tailored to their interests—and accessible any time they want it. On the other hand, advertisers want access to these warm bodies, putting their sights on video to do it.
The year 2018 has witnessed many profound developments that are forcing the media and entertainment industry to rethink their business models. Indeed, some are keenly exploring how best to leverage new technologies and standards such as IP, AI, AR, VR, and SMPTE ST 2110 to transform their work practices, monetize their media assets and engage their fragmenting audiences.
Time spent on digital access globally outstripped linear– accounting for a 38 percent share of media engagement (compared to TVs 37%). This puts broadcasters, service providers and operators under pressure as they adapt their operational and business models to respond.
2018 was a year of upheaval for the media-and-advertising world as Facebook battled one public-relations crisis after another, digital media hit a wall, TV viewers started the process of cable cord cutting, and direct-to-consumer companies gained attention.
Trends to look forward to in 2019
There will be a continued transformation in the media and entertainment space in 2019, with growing mobile consumption, increased demand for direct-to-consumer and OTT offerings, and the rise of user-generated content driving the industry forward. 2019 will see media companies continue to try to combat the tech giants with new streaming-video-service options. Digi.tal-media companies will get profitable or fade away. Facebook will make up for slowing growth with Instagram. The line between DTC and legacy companies will increasingly blur.
2019 will see further convergence of technology, social media, and entertainment. As the lines continue to blur across traditional media and social sharing platforms, competition between distributors and content creators will be stronger than ever, further fueling market consolidation, as well as mergers and acquisitions. 5G is expected to propel on-demand entertainment and media offerings, enabling new levels of connectivity and instantaneous access to content anytime, anywhere. With the shift to the on-demand economy, subscription revenues are well poised to match advertising revenues, and even displace digital advertising in some areas where advertising has long been preeminent.
Streaming wars will heat up. Trying to catch up to Netflix, media and entertainment conglomerates AT&T, Disney, and perhapsv Comcast are planning to launch their own streaming services to capture cord cutters who prefer watching shows on internet-connected services over linear TV. But it would not be easy. People are already drowning in entertainment choices: Consumers have access to about four pay-TV services but regularly watch only two. The legacy companies also will have to dig deep into their pockets to build these new services and the customer-service infrastructure that go with them. Consumers, are developing expectations for functionality, which helps brands find user-generated content. The platforms need to address those. It is not only the content. They do not have the advantage of being in conversation with the consumer. Moreover, the legacy companies are going up against not just Netflix but also the tech giants Amazon, Apple, Facebook, and Google, which also are building massive content offerings. And by encouraging viewers to watch their content online, the TV companies may fuel the cord-cutting trend.
Broadcast TV is not dying. Across every age group, internet users still watch more broadcast TV than online, despite year-on-year drops in broadcast engagement. It has the greatest reach, and commands the most time. This goes to show that, while streaming giants like Netflix continue to spread globally, online TV is not cannibalizing broadcast – it is complementing it.
Multichannel is everywhere. It is no longer enough for consumers to consume one mode of entertainment. Consumers need a constant multi-platform experience to feel engaged and satisfied. That is why many brands are discovering the power of multi-channel in keeping viewers engaged. This trend has been growing consistently every year and it will continue to increase.
Regional content will continue to grow. Vernacular exploded in 2018 and will continue to grow through 2019. Till 2017, it was predominantly English language which was being accessed for digital. But in 2018, a lot more local language content was created and consumed. This is going to be a very important focus in 2019 because it will also bring in the next wave of people coming on to digital. The consumption trend is pretty much at a saturation point as far as English-speaking and understanding audience is concerned, and therefore the next leg of growth for digital is expected to come in from small towns and cities. Also, the growth will be through people who are just coming on to digital through mobile phones. This means the investments in digital are increasing. Every year digital is growing at a CAGR of 30–35 percent and this growth is not going to slow down, the pace is only going to quicken up.
eSports is becoming mainstream. eSports viewers are a desirable demographic for marketers, and continued investment and organization of competitions is propelling the sport’s broadcasts toward established, mainstream media channels. Content producers and rights owners are now looking to leverage new value streams from markets such as eSports. 2019 will see eSports cement itself into the mainstream as more competitions are delivered via traditional broadcasters and digital platforms. There is rise in investments in dedicated eSports stadiums. This will be a key sector to watch in the year ahead.
Social media is an entertainment hub. Social platforms are increasingly looking to integrate sports commentary with broadcasting rights, in a bid to draw viewers from broadcast TV. But this is not where their content strategies end. Social media services are also investing in long-form video platforms and looking more at music licensing, ultimately looking to upgrade social media into a one-stop entertainment hub for users. And with 44 percent of internet users watching a video on social media in the past month, it is a clearly shift that is taking shape.
Facebook will hold on to its edge through Instagram. The social network has had one bad headline after another in 2018 as it suffered a string of scandals and public-relations nightmares. It will cost Facebook a lot to fix its internal problems, and on top of that, the digital-ad market itself might slow, Pivotal Research’s Brian Wieser predicted. But it still has a powerful asset in Instagram, which is ramping up with 2018’s rollout of IGTV. There are a lot of publishers increasing investment in Instagram and IGTV and monetizing it through branded content. It gives them a way to find new budgets.
AI will be the next battleground. Intelligent data collection, visualization, and analytics will be crucial for success in content creation, distribution, monetization, and user experience. Artificial intelligence (AI) will be leading the way for tailored recommendation services, targeted content and ad delivery, and even original programming and content creation. AI-enabled virtual assistants will become the next battleground in the connected environment of in-home and out-of-home entertainment.
AR will surpass VR. One intriguing goal of personalization is developing interactive experiences where consumers can fully engage with the created environment, enjoying their own unique experience and story. Supported by evolving technologies of 360-degree video/photos, VR and AR, immersive experiences are starting to take shape, finding their way into journalism, education, music, and sport events. Thus far, the hardware category within the AR/VR market accounted for a lion’s share of the overall revenue. As the hardware become more evolved and accessible, the software sector is projected to experience higher growth. The AR market is well positioned to surpass VR in revenue, and mobile AR is forecast to dominate the AR/VR ecosystems for the foreseeable future.
Commercials galore. In 2019, there will be an increased spend on digital video advertising. According to eMarketer, between 2015 and 2019, the amount of digital video advertising transacted programmatically will nearly double. This means regardless of what channel is being consumed media on, there will be more advertising and as the data continues to proliferate, those advertisements will be more and more tailored to individual musings.
The technology landscape is evolving at a pace unprecedented in history, propelling the industry and its leaders forward. It is an incredible time to be in the industry and to be a part of a transformational time that will change the industry.