Trends to Watch for Media & Entertainment Brands in 2023
As we enter the new year, we wanted to look forward to what changes we can expect to see in the Media and Entertainment (M&E) industry in 2023.
The M&E industry is slowly bouncing back nearly three years after the global pandemic caused massive disruption and shifts in everything from content creation to how audiences consume it. The industry faced those challenges and persevered, with 2022 seeing a nice rebound, including increased travel and a return to in-person events, while retaining increased digital media consumption. But the world is still experiencing an economic downturn.
On top of social and economic pressures, M&E companies are constantly challenged to increase revenue and reduce operating costs while still maintaining a fast time-to-market. Additionally, other obstacles have recently arisen from increased market competition due to continued mergers and acquisitions, changing consumer behaviors and new media platforms. With all this in mind, what areas deserve the most focus and investment for the upcoming year? Based on our depth of experience across the M&E industry, we’ve narrowed it down to four key trends to keep in mind for 2023.
1. Revenue Stream Optimization
As a potential recession looms, it’s more important than ever for M&E companies to proactively focus on evolving and optimizing their revenue streams. One way to do so is by focusing on constructing ecosystems of interconnected experiences, enabling brands to collect billions of data points from customers in real-time.
Understanding consumers by analyzing the data they create gives M&E companies the opportunity to personalize the entertainment experiences they offer. They can leverage artificial intelligence (AI) and machine learning (ML) models to assist with content planning and recommendation engines to serve more personalized content to the right audience at the right time, increasing loyalty, reducing churn and maximizing revenue opportunities.
In parallel, companies can update and improve their current subscription and advertisement models. Many consumers have more than one streaming service subscription and there are more providers constantly coming to market. With many traditional content providers merging, this opens the opportunity for more cross-selling and service bundling. For instance:
- Bundling access to various digital streaming platforms under a single subscription.
- Pairing streaming subscription services with other commodity services, like internet, mobile phone or TV plans.
- Allowing for ad-supported subscription models and sponsorship opportunities.
Matching personalized offerings to consumers based on their behaviors and offering compelling subscription services can help M&E companies increase revenue and maintain their advantage in a competitive space.
2. More Immersive Entertainment Experiences
Consumer behaviors and expectations have changed a lot over the last few years, impacting the types of immersive content and entertainment experiences M&E companies produce. Consumers have grown more comfortable with digital experiences and expect more high-quality and on-demand content than ever. For M&E companies to stay competitive, they must rethink the ways in which they engage with consumers. For instance:
- For content providers: Building omnichannel experiences for users to access content from a variety of sources in one place. This includes leveraging non-traditional platforms like AR, VR and gaming.
- For in-person M&E companies: Focusing on blend spaces that incorporate physical and digital experiences and leverage IoT, augmented reality and environmentally sustainable products.
- Growing audience interaction by leveraging omnichannel marketing through Web3 brand-focused communities and NFT offerings, opening bidirectional communication between audiences and brands.
These types of diversified service offerings and innovative content models will be critical for the generation of new revenue streams.
3. Media Supply Chain Modernization
Many of the largest M&E companies have created advanced media supply chains that have become the backbone of their organizations, covering the entire content lifecycle from ideation, planning and creation, to media management, distribution and playback.
But just as product manufacturers have been facing a physical supply chain crisis, so too have M&E companies with digital media supply chains. As business needs and technologies have expanded over time, many media supply chains have become duplicative or overly complex due to patchwork integrations. Additionally, these supply chains face technological obsolescence due to limited feature scalability and antiquated user interfaces. As a result, it’s difficult for M&E companies with legacy supply chains to reduce operational costs and still meet the aggressive timelines the market demands. Because of this, expect to see many M&E companies in 2023 undertaking modernization efforts for their media supply chains, such as:
- Developing scalable, microservice based digital media supply chain frameworks that make it easier to implement future iterations and enhancements.
- Creating ways to manage complex rights, royalties and scheduling requirements for various media assets in increasingly global linear and non-linear content distribution agreements.
- Adapting media asset management solutions to leverage more AI-driven solutions to accommodate for the increasing volume, size and variety of media assets.
By automating and modernizing their end-to-end media supply chain, M&E companies can more easily adapt to the changing business landscape and do so in cost-effective way.
4. A Focus on Creative Technological Innovation
Lastly, many M&E companies have slowly been transitioning from being solely focused on content and entertainment, to also becoming technology innovation companies. Since they deal with complex, creative workflows regularly, most have had to come up with creative processes and technology to address their back-of-house needs. However, M&E companies that want to thrive will need to continue showing their technical ingenuity in all areas of their business, including consumer-facing products and employee experiences. For instance:
- Migrating production and operations capabilities to the cloud to reduce costs and allow for more flexibility and scalability through virtualization.
- Investing in cybersecurity and content protection technologies to mitigate growing piracy and concerns around content and PII data.
- Revamping employee and customer experiences to be more DEI and accessibility focused to account for diversity in the workplace and with consumers.
- Tracking carbon footprints and providing more environmentally sustainable solutions and experiences.
These innovations are often additional areas that provide not just cost savings and operational efficiency, but also potential new revenue generation for M&E companies as they can be novel solutions that have applications in other industries as well.
The coming year is sure to be exciting and filled with more ingenuity and advancements in the M&E space, while likely tempered with a deeper focus on minimizing costs and maximizing revenue to remain competitive with a potential recession on the horizon.
Moreso than other industries, in M&E the lines between technology and operations continues to blur as inventive solutions help creative companies stay ahead. As you’re preparing for the coming year, make sure to consider the following strategic questions:
- Is your organization focusing on optimizing existing revenue streams and defining new ones?
- Does your organization have experience developing immersive entertainment experiences or leveraging AR, VR, gaming and Web3?
- Is your organization modernizing your backend media supply chains to both scale for future demands and power new business needs and entertainment experiences?
- Is your organization viewed as a leader in the technology and M&E space?
The innovative companies that seamlessly integrate their tech will be the ones that have the competitive advantage and come out ahead in 2023. With the combination of the right strategic investments to accelerate value, a holistic implementation approach and qualified resources, your 2023 should be looking very bright indeed!