We continue our technology-focused look into industry verticals by beginning a series in the Media & Entertainment (M&E) industry. Perhaps no other industry vertical, apart from Healthcare, has had such an impact on public habits during the Covid-19 pandemic. The first blog in this series looks to establish the business baseline for M&E before we examine trends and technology platforms in the coming weeks and months.
An Introduction to the Media and Entertainment (M&E) industry –
The M&E industry is defined as an industry concerned with producing, distributing, and offering digital services around feature films, motion pictures, sports events, TV programs, and Commercials. This category includes a range of players including traditional content producers such as TV networks (e.g. Disney, Fox, NBC, CNN, etc), Social media giants (Meta, Twitter, Reddit et al), and OTTs (Over the top streaming services) such as Netflix, Amazon Prime, Peacock, Disney etc. Though some break out the video gaming industry separately, it can be considered as a segment of the M& industry.
Let us understand the key characteristics of this industry and then consider their key metrics.
- The M&E industry is in the middle of digital transformation, ahead of other industry verticals. The COVID 19 pandemic accelerated a move away from in-person events such as cinemas, sporting events, political rallies, etc. Thus, digitizing the end-to-end supply and value chains is driving industry movement to the Cloud and AI.
- To add to the above trend, streaming is now the key business model for many players. Metrics such as subscriber counts, total lifetime values, engagement quality, and time will be key to profitability
- As more and more people begin to move to consume news and online services majority online, expect to see more cross-industry collaboration with retailers and advertisers.
- Trends such as Metaverse and NFT (Nonfungible tokens) will impact content production and consumption.
The M&E Industry, by numbers –
2021 M&E industry Outlook (source Pricewaterhouse Coopers)
According to Trade. gov[1] –
- The U.S. Media and Entertainment (M&E) industry is the largest in the world at $660 billion (of the $2 trillion global market) – enduring an estimated $53B or 7.3% decline due to the pandemic.
- The uptick in streaming services and subscriptions for digital media in 2020 has been a boon for the MVoD, Video Games, and Music sectors, while live performance, touring and the gig economy have been forced to pivot or shutter, as physical continues its decline.
- The M&E industry is comprised of businesses that produce, distribute and offer ancillary digital services and products for: the Motion Pictures, Television programs, and Commercials along with Streaming Content, Music, Video and Audio recordings, Broadcast, Radio, Text and Book Publishing, eSports and Video Games sectors.
- In 2018, total core copyright industries added 2.2 trillion dollars to the U.S. economy (accounting for 11.6%) and employed over 11.6 million workers. These industries grew on average 5.23% a year, while the U.S. economy as a whole averaged 2.21% annually.
Conclusion
Media and entertainment customers are in the midst of a perfect digital storm with challenges in terms of reinvention. Companies are changing how they create content, manage their media assets and build audiences that now have many choices as opposed to movies and cable. The next blog will consider the five key choices driving workloads in the industry: Content Production; Media Supply Chain & Archive; Broadcast; Direct-to-Consumer & Streaming; and Data Science & Analytics.
References –
[1] https://www.trade.gov/media-entertainment
Image by Mudassar Iqbal from Pixabay