In 2022, media and entertainment companies have a familiar landscape influenced by consumer behavior dynamism, technological know-how, competitive intensity, and industry reshaping. Mix in the continued outcomes of the pandemic on business conditions as well as the workforce, an inflationary economy, as well as a charged social and political landscape, and company leaders are steering through unpredictable terrain. Allow me to share five trends to view in the year ahead since the industry functions reframe its future.

1. Content distribution gets (more) complex
Acquisition of new original content shows no sign of slowing as we move into 2022. Content is the fuel that drives consumer interest and engagement across platforms - streaming, broadcast and cable networks. How the content reaches consumers, however, often involves an intricate decision-making process.

The direct-to-consumer (D2C) pivot will the main strategic priority to the industry within the coming year. Operators and investors alike are centered on subscriber growth and retention because key performance indicators for services where switching costs for individuals are minimal. Despite their rapid growth during the last two years, most D2C services operated by media companies remain unprofitable and consume cash, devouring resources through the overall enterprise.

The main city intensity connected with streaming highlights the importance 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 cashflow engines. To avoid a dislocated unwinding in the legacy pay-TV environment as well as valuable monthly subscriber fees and advertising revenues, network owners must still direct fresh content, including sports, on their linear channels to hold viewers engaged.

Around ahead, operators (particularly those devoid of the scale or capital resources to visit truly “all in” on streaming today) will probably be faced with challenging decisions around programming their streaming platforms they are driving growth, as well as remaining profitable but structurally declining linear businesses to create earnings. This can be a tricky balanced exercise.

Functioning on these decisions will need sophisticated modeling and disciplined business planning that spans creative and executive priorities to offer the optimal mixture of growth and financial outcomes.

2. Simplified and customised experiences take center stage
In 2022, consumers continuously search for unique experiences and ubiquitous use of entertainment content. Businesses that solve the discoverability puzzle and aggregate content in a more intuitive and accessible way will popularity.

Consumers expect effortless interactions through the entire end-to-end customer journey, from sign-up to usage and billing. Accordingly, we will have more companies participating in the streaming value chain. Network owners, broadband providers and connected TV manufacturers is going to be making plans to simplify, optimize and integrate layers and compatibility tools across platforms to further improve the person experience.

Content discovery is starting to become increasingly a hardship on consumers since they bounce between streaming services trying to find new series and old hits on the list of avalanche of available programming. Tech-savvy companies that harness valuable viewership data to give customers numerous content they need will relish an aggressive advantage. In 2022, streamers playing catch-up will refine their recommendation engines depending on demonstrated subscriber preferences and usage history, and tailor their marketing - in-platform and also over external channels - to make consumers conscious of every one of the viewing options.

Bundling also can enhance the consumer experience. The scaled digital-native streamers supply a variety of integrated offerings on their video subscribers - shopping, gaming, devices, as well as 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 aim to create their particular “flywheels” that provide a portfolio of offerings with their streaming subscribers, driving new sign-ups and adding stickiness to the D2C revenue model, extending lifespan with the customer relationship.

A deep lineup of desirable programming is table stakes for that streaming game. In an environment where consumers are juggling an expanding assortment of services and switching prices are low, media companies must deliver an event that keeps subscribers connected and engaged.

3. Movie night will go back to the theatre
The results in the pandemic on the movie business have been severe. Cinema owners struggled to be open as moviegoers stayed away due to virus concerns and limited accessibility to fresh film product. Even though the emergence of the Omicron COVID-19 variant is adding uncertainty, there are signals pointing with a constructive path forward for that box office in 2022.

In 2021, 13 films grossed over $100 million according to Box Office Mojo, down from over 30 in 2019. Nonetheless, results in 2021 indicated a long lasting audience appetite for “blockbuster” features as reopening across the nation gained steam, prompted to some extent with the distribution of effective vaccines. Looking ahead, a substantial slate of long-anticipated tentpole movies should help drive the recovery in theatre admissions.

A big change that will hold in 2022 may be the abbreviation with the exclusive theatrical window to approximately 45 days and, for some mid-size films, a day-and-date release approach that permits people to view new movies inside the theatre or in your house. After a difficult series of negotiations between theatres and studios, the film industry offers aligned with an approach that preserves the features of the theatrical window while acknowledging the reality of 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 happen on opening weekend and also the following several weeks, together with ability for studios to leverage marketing spend simply a film’s premiere into future distribution windows, specifically fast-following D2C availability.

4. NFTs have entered the press chat
Excitement is building around NFTs as a vehicle for media companies to grow engagement with their content and IP and might provide a future monetization model since the market matures.

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

To become listed on the experience, media companies are forming relationships with NFT technical specialists and marketplaces to develop offerings that enable people to take part in a completely new way making use of their superheroes, movie and TV show scenes and also other content. NFTs allow media industry players to create cross-platform consumer interactivity anchored in proven IP and to build new communities by extending the customer relationship into emerging digital areas.

In 2022, the media and entertainment industry will undertake a lot of NFT innovation and experimentation. Auto return of such efforts is unclear; today, NFT projects in media and entertainment space are essentially marketing investments intended to power engagement also to access fans - particularly those active in crypto - desperate to deepen their association with popular content. Down the road, media companies could generate royalty income in connection with secondary sales of NFTs… perhaps in transactions tied to activities going on inside the metaverse.

5. M&A remains a popular item about the menu
Over the last 1 year, the press and entertainment industry saw the greatest players execute on the selection of transactions - landscape-shifting megamergers, bolt-on acquisitions of smaller studios including properties in international markets that produce localized content, targeted deals for niche IP assets that can be leveraged to produce fresh programming, and innovative joint ventures meant to accelerate global streaming growth on a capital-efficient basis.

In 2022, the consolidation of studios and networks continue as companies aim to build the content, capabilities and scale had to battle the digital-native behemoths who gain from 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 company infrastructure to attain ambitious efficiency goals. Cost savings realized through integration will fund future growth investment and boost profits, an important objective because industry transitions in the stable, high-margin linear world into a streaming ecosystem that drives less-profitable revenue (for the time being).

Robust conditions privately and public capital investing arenas are enabling companies to offer non-core businesses as well as other corporate assets that will no longer fit their evolving growth strategies or capital allocation priorities. Accordingly, asset divestitures will be a key trend in 2022 also. Activist investors will have a part in certain of such transactions, serving as another catalyst for change.

The press and entertainment industry has long been a whirlwind of strategic activity as companies build, renovate and tear down business portfolios in response to market developments, and 2022 will be no different. These five trends indicate the media companies are poised for one more year of exciting change, as companies drive innovation, tackle new challenges and capture possibilities to position themselves for growth.


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