In 2022, media and entertainment companies will experience a familiar landscape relying on consumer behavior dynamism, technological know-how, competitive intensity, and industry reshaping. Match the connection between the pandemic on business conditions along with the workforce, an inflationary economy, and a charged social and political landscape, and company leaders are steering through unpredictable terrain. Allow me to share five trends to watch around ahead as the industry works to reframe its future.

1. Content distribution gets (more) complex
Investment in new original content shows no sign of slowing even as we transfer to 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 elaborate decision-making process.

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

The capital intensity related to streaming highlights the value for media companies to reap the financial benefits of the 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 with the legacy pay-TV environment and its particular valuable monthly subscriber fees and advertising revenues, network owners must carry on and direct fresh content, including sports, to their linear channels to hold viewers engaged.

In ahead, operators (particularly those minus the scale or capital resources to look truly “all in” on streaming today) is going to be confronted with challenging decisions around programming their streaming platforms they are driving growth, while also remaining profitable but structurally declining linear businesses to create income. This can be a tricky juggling act.

Working on these decisions will demand sophisticated modeling and disciplined business planning that spans creative and executive priorities to own optimal mixture of growth and financial outcomes.

2. Simplified and customized experiences take center stage
In 2022, consumers continually seek out unique experiences and ubiquitous access to entertainment content. Companies that solve the discoverability puzzle and aggregate content inside a more intuitive and accessible way will rise to the top.

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

Content discovery is now increasingly a hardship on consumers as they bounce between streaming services seeking new series and old hits on the list of avalanche of obtainable programming. Tech-savvy businesses that harness valuable viewership data to present customers more of the content they need will like a competitive advantage. In 2022, streamers playing catch-up will refine their recommendation engines based on demonstrated subscriber preferences and usage history, and tailor their marketing - in-platform and also over external channels - to create consumers alert to all of the viewing options.

Bundling can also improve the consumer experience. The scaled digital-native streamers provide a selection of integrated offerings with their video subscribers - shopping, gaming, devices, and also other digital services. Media companies with diversified businesses or innovative partnerships with third parties - including within the digital asset arena (e.g., non-fungible tokens, or NFTs) - will try to create their unique “flywheels” that provide a portfolio of offerings with their streaming subscribers, driving new sign-ups and adding stickiness for the D2C revenue model, extending the life span in the customer relationship.

A deep lineup of desirable programming is table stakes for that streaming game. Within an environment where rrndividuals are juggling an evergrowing collection of services and switching costs are low, media companies should deliver an event that keeps subscribers connected and engaged.

3. Movie night will resume the theatre
The consequences with the pandemic around the movie business have already been severe. Cinema owners struggled to keep open as moviegoers stayed away because of virus concerns and limited option of fresh film product. As the emergence in the Omicron COVID-19 variant is adding uncertainty, you'll find signals pointing to some constructive path forward for your box office in 2022.

In 2021, 13 films grossed over $100 million based on Box Office Mojo, below over 30 in 2019. Nonetheless, ends in 2021 indicated the perfect audience appetite for “blockbuster” features as reopening in the united states gained steam, prompted simply by the distribution of effective vaccines. Looking ahead, a robust slate of long-anticipated tentpole movies will help drive the recovery in theatre admissions.

A change that will hold in 2022 could be the abbreviation in the exclusive theatrical window to approximately 45 days and, for a lot of mid-size films, a day-and-date release approach that enables customers to view new movies from the theatre or at home. From a difficult compilation of negotiations between theatres and studios, the film industry appears to have aligned on an approach that preserves the highlights of the theatrical window while acknowledging the reality of streaming popularity.

The shorter first-run window enables studios and theatres (and creative talent) to really benefit from successful major releases - namely the huge ticket sales that occur on opening weekend as well as the following a few months, plus the ability for studios to leverage marketing spend in support of 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 as being a vehicle for media companies to flourish engagement using their content and IP and may supply a future monetization model as the market matures.

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

To join the action, media organizations are forming relationships with NFT technical specialists and marketplaces to build up offerings that enable people to engage in an entirely new way with their farvorite cartoon characters, movie and television show scenes along with other content. NFTs allow media industry players to make cross-platform consumer interactivity anchored in proven IP also to build new communities by extending the buyer relationship into emerging digital areas.

In 2022, the media and entertainment industry will undertake lots of NFT innovation and experimentation. The economical return of these efforts is unclear; today, NFT projects on television and entertainment space are essentially marketing investments designed to power engagement and access fans - specially those active in crypto - desperate to deepen their connection to popular content. Down the road, media companies could generate royalty income in connection with secondary sales of NFTs… perhaps in transactions tied to activities occurring within the metaverse.

5. M&A remains a trendy item on the menu
Over the past Yr, the media and entertainment industry saw the largest players execute on a 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 make fresh programming, and innovative joint ventures supposed to accelerate global streaming growth over a capital-efficient basis.

In 2022, the consolidation of studios and networks will continue as companies attempt to build the content, capabilities and scale necessary to battle the digital-native behemoths who make use 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 achieve ambitious efficiency goals. Cost savings realized through integration will fund future growth investment and boost profits, a vital objective as the industry transitions from your stable, high-margin linear world with a streaming ecosystem that drives less-profitable revenue (for the time being).

Robust conditions in private and public capital financial markets are enabling companies to market non-core businesses and also other corporate assets that not fit their evolving growth strategies or capital allocation priorities. Accordingly, asset divestitures is a key trend in 2022 also. Activist investors will play a job in most of the transactions, being another catalyst for change.

The media and entertainment industry happens to be a whirlwind of strategic activity as companies build, renovate and dismantle business portfolios as a result of market developments, and 2022 will be no different. These five trends indicate how the media marketplace is poised for the next year of exciting change, as companies drive innovation, tackle new challenges and capture the opportunity to position themselves for growth.


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