According to a report by the US Department of Commerce, the media and entertainment market have reached a revenue of around USD $1.9 trillion in 2016. The United States is its largest market at around USD $712 billion, followed by China at USD $190 billion. This lucrative and risky industry is composed of film, print, radio, and television. The industry significantly helps the US economy with an annual contribution of around USD $41 billion yearly and generates 2 million employment.
The Future of Media and the Entertainment Industry
Following the advent of digitalization, the industry has its fair share of disruption and significant changes. For one, digital spending triggered a 10 percent increase in spending. Meaning many consumers choose to purchase internet-based entertainment and media products and services. Streaming, may it be video or music, is the main driving force for this sensation.
The music industry reported a 17% increase in revenue in 2017, due to an overwhelming contribution of around 100 million consumers subscribing to streaming services. This is an amazing development for the industry, but the future still looks promising. Let’s take a look at the future of the media and entertainment industry.
Streaming services have rapidly replaced the now old fashioned digital music download. In 2017, streaming services took an incredible increase in demand and experts forecast the same thing to happen in 2018. In fact, Ericsson predicted that only 10% of people will watch and use traditional TV entertainment.
Video streaming also gets to hold a stunning growth rate after reaching USD $30.29 billion in revenue in 2016. TV and OTT (Over-The-Top) subscriptions like Netflix and Amazon Prime Video are so welcomed by consumers that it is forecast to drive the market to gain USD $70.05 billion in 2021. In addition, many connected TV devices has been made available in the market like Fire Stick TV from Amazon, Chromecast, and Roku TV. These devices are made to make streaming services to be effectively convenient, marketable, and enjoyable. In the end, it made consumers develop a habit of reliance on streaming services.
A New Ecosystem of Services
According to PwC, the media and entertainment industry will experience a form of merging in the next few years. This is due to the overlapping related services provided by different companies in the industry. The industry will develop a kind of hybrid company that can provide unified and conducted services and products.
TV networks, Telecommunications, social media, studios, and streaming service companies all strive and compete on providing quality visual content. To minimize intersecting with one another, there will be a lot of merging and acquisitioning to consolidate and create a healthier kind of industry competition.
Many Data Hungry Services
PricewaterhouseCoopers forecasted that over the next five years, data traffic will reach 397.9 trillion megabytes in 2022. Data consumption will increase significantly over the next years, driven by consumers’ appetite for video content and other streaming services.
Not everyone in the world has experienced 4G or LTE yet, but 5G wireless networks are already peaking in the horizon. 5G is the fifth generation of wireless communications that will follow the current 4G network and promises intensified capacity, lower latency and faster speed. According to a test conducted by Verizon, 5g networks are capable of delivering an astounding internet speed of 3.77 Gbps. With this potential speed, one can only imagine the possible advancements it can provide to the existing services. Furthermore, this kind of internet speed can open up new media and entertainment products and services.
We cannot deny that the industry reached this point because it is made up of fierce competition, enticing profit, and amazing ideas. To strive in the media and entertainment industry, companies need to provide quality products and services that is sensitive to the available technology and consumer demands.