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In 2022, media and entertainment companies have a familiar landscape depending consumer behavior dynamism, technological innovation, competitive intensity, and industry reshaping. Add the effects of the pandemic on business conditions and also the workforce, an inflationary economy, as well as a charged social and political landscape, and company leaders are steering through unpredictable terrain. Here are five trends to view that year ahead as the industry activly works to reframe its future.

1. Content distribution gets (more) complex

Acquisition of new original content shows no symbol of slowing as we move into 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, ofttimes involves an elaborate decision-making process.

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

The funding intensity related to streaming highlights the benefit for media companies to reap the financial benefits of the linear ecosystem. At the same time cord cutting gradually shrinks the universe of traditional video subscriptions, broadcast and cable networks remain income engines. To avoid a dislocated unwinding of the legacy pay-TV environment and its valuable monthly subscriber fees and advertising revenues, network owners must always direct fresh content, including sports, for their linear channels to help keep viewers engaged.

That year ahead, operators (particularly those without the scale or capital resources to travel truly “all in” on streaming today) will be faced with challenging decisions around programming their streaming platforms to operate a vehicle growth, whilst remaining profitable but structurally declining linear businesses to generate cash flow. This is a tricky balanced exercise.

Acting 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 is constantly find unique experiences and ubiquitous entry to entertainment content. Companies which solve the discoverability puzzle and aggregate content inside 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 the user experience.

Content discovery is becoming increasingly difficult for consumers since they bounce between streaming services looking for new series and old hits one of the avalanche of accessible programming. Tech-savvy businesses that harness valuable viewership data to offer customers numerous content they want will enjoy an affordable 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 over external channels – to make consumers mindful of all the viewing options.

Bundling may also boost the buyer 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 others – including from the digital asset arena (e.g., non-fungible tokens, or NFTs) – will try and create their own “flywheels” that provide a portfolio of offerings on their streaming subscribers, driving new sign-ups and adding stickiness to the D2C revenue model, extending lifespan from the customer relationship.

An in-depth lineup of desirable programming is table stakes to the streaming game. Within an environment where rrndividuals are juggling a growing variety of services and switching prices are low, media companies need to deliver an experience that keeps subscribers connected and engaged.

3. Movie night will return to the theatre

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

In 2021, 13 films grossed over $100 million according to Box Office Mojo, below over 30 in 2019. Nonetheless, ends in 2021 indicated a long lasting audience appetite for “blockbuster” features as reopening across the country gained steam, prompted simply with the distribution of effective vaccines. Looking ahead, a strong slate of long-anticipated tentpole movies will help drive the recovery in theatre admissions.

An alteration that will hold in 2022 may be the abbreviation from the exclusive theatrical window to approximately 45 days and, for some mid-size films, a day-and-date release approach so that customers to view new movies inside the theatre or in your house. After a difficult compilation of negotiations between theatres and studios, the show industry appears to have aligned while on an approach that preserves the tools in the theatrical window while acknowledging the reality of streaming popularity.

The shorter first-run window will permit studios and theatres (and inventive talent) to really benefit from successful major releases – namely the huge ticket sales that happen on opening weekend along with the following many weeks, in addition to 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 press chat

Excitement is building around NFTs as a vehicle for media companies to flourish engagement with their content and IP and may even supply a future monetization model as the market matures.

Early adopters are getting NFTs linked to sports, art, collectibles plus 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 become listed on the action, media publication rack forming relationships with NFT technical specialists and marketplaces to formulate offerings that enable people to engage in an entirely new way making use of their favorite characters, movie and television show scenes and other content. NFTs allow media industry players to generate cross-platform consumer interactivity anchored in proven IP and also to build new communities by extending the consumer 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 such efforts is unclear; today, NFT projects in media and entertainment space are essentially marketing investments supposed to power engagement and access fans – especially those active in crypto – desperate to deepen their connection to popular content. Down the road, media companies could generate royalty income related to secondary sales of NFTs… perhaps in transactions associated with activities taking place inside the metaverse.

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

Throughout the last 1 year, the press and entertainment industry saw the largest players execute over a number 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 which can be leveraged to create fresh programming, and innovative joint ventures intended to accelerate global streaming growth on the capital-efficient basis.

In 2022, the consolidation of studios and networks continues as companies seek to build this article, capabilities and scale necessary to battle the digital-native behemoths who really benefit 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, a vital objective because the industry transitions from the stable, high-margin linear world into a streaming ecosystem that drives less-profitable revenue (in the meantime).

Robust conditions in private and public capital investing arenas are enabling companies to sell 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 might be a key trend in 2022 as well. Activist investors will have a job in a few of these transactions, becoming another catalyst for change.

The press and entertainment industry has long been a whirlwind of strategic activity as companies build, renovate and destroy business portfolios in response to market developments, and 2022 will not be any different. These five trends indicate that the media companies are poised for one more year of exciting change, as companies drive innovation, tackle new challenges and capture the possiblility to position themselves for growth.

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