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In 2022, media and entertainment companies will experience a familiar landscape depending consumer behavior dynamism, technological know-how, competitive intensity, and industry reshaping. Mix in the continuing outcomes of the pandemic on business conditions along with the workforce, an inflationary economy, along with a charged social and political landscape, and company leaders are steering through unpredictable terrain. Listed below are five trends to watch in the year ahead because industry activly works to reframe its future.

1. Content distribution gets (more) complex

Acquisition of new original content shows no indication of slowing as we transfer to 2022. Content is the fuel that drives consumer interest and engagement across platforms – streaming, broadcast and cable networks. The way the content reaches consumers, however, frequently involves a complicated decision-making process.

The direct-to-consumer (D2C) pivot will the primary strategic priority for the industry in the coming year. Operators and investors alike are devoted to subscriber growth and retention because the key performance indicators for services where switching costs for consumers are minimal. Despite their rapid growth over the past couple of years, most D2C services operated by media companies remain unprofitable and consume cash, devouring resources from your overall enterprise.

The funding intensity associated with streaming highlights the value for media companies to harvest the financial making use of your linear ecosystem. Even as cord cutting gradually shrinks the universe of traditional video subscriptions, broadcast and cable networks remain income engines. In order to avoid a dislocated unwinding in 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 hold viewers engaged.

In the year ahead, operators (particularly those without the scale or capital resources to travel truly “all in” on streaming today) will likely be facing challenging decisions around programming their streaming platforms they are driving growth, as well as remaining profitable but structurally declining linear businesses to get income. This is the tricky joggling act.

Functioning on these decisions will demand 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 look for unique experiences and ubiquitous access to entertainment content. Businesses that solve the discoverability puzzle and aggregate content in a more intuitive and accessible way will popularity.

Consumers expect effortless interactions during the entire end-to-end customer journey, from sign-up to usage and billing. Accordingly, we will see more companies playing the streaming value chain. Network owners, broadband providers and connected TV manufacturers will likely be taking action to simplify, optimize and integrate layers and compatibility tools across platforms to boost an individual experience.

Content discovery is starting to become increasingly hard for consumers as they bounce between streaming services searching for new series and old hits on the list of avalanche of available programming. Tech-savvy companies which harness valuable viewership data to give customers numerous content they need will relish a competitive advantage. In 2022, streamers playing catch-up will refine their recommendation engines according to demonstrated subscriber preferences and usage history, and tailor their marketing – in-platform as well as over external channels – to create consumers conscious of every one of the viewing options.

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

An in-depth lineup of desirable programming is table stakes to the streaming game. In an environment where individuals are juggling an increasing assortment of services and switching costs are low, media companies need to deliver an experience that keeps subscribers connected and engaged.

3. Movie night will go back to the theatre

The consequences with the pandemic for the movie business happen to be severe. Cinema owners struggled to stay open as moviegoers stayed away as a consequence of virus concerns and limited use of fresh film product. As the emergence from the Omicron COVID-19 variant is adding uncertainty, you’ll find signals pointing to a constructive path forward to the box office in 2022.

In 2021, 13 films grossed over $100 million as outlined by 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 country gained steam, prompted to some extent from the distribution of effective vaccines. Looking ahead, a sturdy slate of long-anticipated tentpole movies should help drive the recovery in theatre admissions.

A change that will hold in 2022 may be the abbreviation in the exclusive theatrical window to approximately 45 days and, for a few mid-size films, a day-and-date release approach so that people to view new movies inside the theatre or at home. From a difficult group of negotiations between theatres and studios, the movie industry offers aligned on an approach that preserves the tools in the theatrical window while acknowledging a realistic look at streaming popularity.

The shorter first-run window will permit studios and theatres (and artistic talent) to gain from successful major releases – namely the huge ticket sales that occur on opening weekend and the following a few months, together with ability for studios to leverage marketing spend meant for a film’s premiere into future distribution windows, specifically fast-following D2C availability.

4. NFTs have entered the media chat

Excitement is building around NFTs being a vehicle for media companies to expand engagement using their content and IP and could give you a future monetization model because the market matures.

Early adopters are getting NFTs related to sports, art, collectibles and much more, acquiring one-of-a-kind digital assets which might be easily tradable and whose ownership and authenticity are recorded via blockchain technology.

To sign up encounter, media publication rack forming relationships with NFT technical specialists and marketplaces to develop offerings which allow people to take part in a completely new way with their favorite characters, movie and television show scenes as well as other content. NFTs allow media industry players to make cross-platform consumer interactivity anchored in proven IP and also to build new communities by extending the customer relationship into emerging digital areas.

In 2022, the media and entertainment industry will undertake a good amount of NFT innovation and experimentation. The economical return of the efforts is unclear; today, NFT projects on television and entertainment space are essentially marketing investments intended to power engagement and to access fans – especially those active in crypto – eager to deepen their association with popular content. In the foreseeable future, media companies could generate royalty income related to secondary sales of NFTs… perhaps in transactions stuck just using activities going on inside the metaverse.

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

Throughout the last 12 months, the media and entertainment industry saw the greatest players execute on a selection of transactions – landscape-shifting megamergers, bolt-on acquisitions of smaller studios including properties positioned in international markets that leave localized content, targeted deals for niche IP assets that may be leveraged to create fresh programming, and innovative joint ventures supposed to accelerate global streaming growth on the capital-efficient basis.

In 2022, the consolidation of studios and networks will keep as companies aim to build this content, capabilities and scale necessary to battle the digital-native behemoths who reap the benefits 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 corporate infrastructure to realize ambitious efficiency goals. Cost savings realized through integration will fund future growth investment and boost profits, a vital objective since the industry transitions from the stable, high-margin linear world with a streaming ecosystem that drives less-profitable revenue (for the present time).

Robust conditions in private and public capital markets are enabling companies to trade non-core businesses and other corporate assets that not fit their evolving growth strategies or capital allocation priorities. Accordingly, asset divestitures might be a key trend in 2022 also. Activist investors will play a role in a few of those transactions, serving as another catalyst for change.

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

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