The media and entertainment industry is forecast to surpass a $1 trillion valuation in 2024, according to Omdia's senior research director María Rua Aguete, a speaker at Tuesday's Future Trends Report panel at Miami's Content Americas, which runs through Jan. 25.
Some of her major points:
The Trillion-Dollar Media and Entertainment Ecosystem
Hitting the trillion mark is propelled by diverse segments, with online video ($345 billion), cinema ($41 billion), music ($44 billion), and games ($255 billion) contributing significantly to the sector's expansion. The dynamics within these segments reveal a complex interplay of consumer preferences, technological advancements, and evolving business models, highlighting the industry's robustness and adaptability in the face of changing market conditions.
Advertising's Dominant Role and the Ascension of Online Video
Advertising continues to underpin the media and entertainment economy, with online video advertising set to become the leading revenue source by 2028. This shift bolsters the changing consumption patterns where digital platforms are increasingly favored over traditional media channels. The projected growth rates— online video subscriptions and TVOD at +14.5% and online video advertising at +18.0% — reflect the move towards digital content, making clear the strategic importance of ad-supported models.
The Continued Emergence of FAST and Its Impact
The Free Ad-Supported Streaming TV (FAST) market is experiencing rapid growth, with projections indicating a significant increase in revenues from 2024 to 2028. The U.S. is expected to dominate this space, commanding a substantial portion of the $13 billion FAST market by 2028, while Western Europe and Latin America are well placed for considerable growth. This trend highlights the increasing consumer appetite for free, quality content and the strategic pivot by media companies towards ad-supported streaming services as a vital revenue stream and audience engagement tool.
Consumer Behavior and Service Stacking
Amidst the proliferation of streaming services, consumer behavior is showing signs of saturation with paid video service stacking beginning to plateau. Most research suggests consumers don't want many more paid services than three. This shift is attributed to the maturation of the market and the increasing scrutiny by consumers of the value proposition offered by multiple subscriptions. The rise of free services as part of the service stacking equation signifies a broader trend towards diversification in content consumption patterns, reflecting the dynamic interplay between paid and free content offerings in capturing and retaining audience attention. A perhaps underreported factor in streamer choice is consumers' telly remotes. The remotes button real estate of the large TV brands has become hot property with Samsung et al able to charge significant multi year sums for branded button prominence.
The Global Perspective: Latin America's Digital Surge
The Latin American market, projected to reach $53 billion by 2028, encapsulates the broader trends reshaping the global media landscape. With online video subscriptions and TVOD growing at 18.2% and online video advertising at 20.5%, Latin America exemplifies the vigorous expansion of digital media. This growth narrative is complemented by the robust performance of gaming, with advertising in this segment set for a 25.4% increase, underscoring the region's increased role in the global media ecosystem's evolution.
Streamers' Gaming Play
It's no secret the gaming sector has seen strong growth and is expected to push past $250 billion in revenue this year. The advertising model within it is also rapidly expanding with Omdia predicting it to rival Linear TV by 2027 at $131 billion in total revenue. The IP adaptation potential is vast but historically challenging creatively. With recent successes with "The Last of Us," "Arcane," and "The Witcher" the focus and expectation is far more bullish. Forthcoming adaptations include a who's who of gaming titles such as "Bioshock," "Fallout," "Mass Effect," and Tom Clancy's Splinter Cell."
The entertaining analysis from Omdia's Rua Aguete offered a prism through which to view the ongoing transformation of the media and entertainment industry. The convergence of advertising, digital content, and consumer preferences nuances the new narrative for the sector, one that emphasizes innovation, adaptability and a knowledge of the past and a nose for the future.
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