In the past, the entertainment industry relied on consumers’ physical attendance to make it profitable. Movie theaters and concerts were some of the biggest industries. However, with the government tightening restrictions on public gatherings and movements, this is no longer the case. Currently, the industry faces many challenges. The Future of the Reel Craze Industry needs fresh ideas and a confident risk-taker. Listed below are the three main challenges to the entertainment industry.
Content is the fuel that drives consumer interest and engagement
The media and entertainment industry is in the midst of a transformation, characterized by dynamism, technological innovation, competitive intensity, and the pandemic of social and political landscapes. As a result, the industry is grappling with the need to reinvent itself and focus on customer-centric content. The wave of on-demand streaming services and other digital-first media platforms has intensified in 2019, while new content is spawning from a variety of different sources.
The rise of user-generated content is another significant force driving this evolution. It is short and easily consumable, and often contains content that audiences may find compelling. Thanks to the rise of social media services that are video-centric, these content sources are boosting the overall consumer experience. According to one survey, over half of US respondents now spend more time watching user-generated content than they did six months ago, and this number jumps to 60% among Millennials and Gen Zs.
According to a Global Web Index report, YouTube will reach more than a billion users by 2021. Moreover, 51% of U.S. and U.K. consumers will use YouTube to do product research and make purchases, while traditional media outlets are unable to provide such a platform. The emergence of these new technologies, such as video, has made content marketing a critical part of a company’s strategy for success.
Consolidation of studios and networks
There are a lot of reasons why Hollywood studios are undergoing consolidation. One is to save costs. In the past, studios have used mergers and acquisitions to reduce costs. This has also allowed them to develop the new property for free for a decade or more. Studios are also buying up land from developers at a reduced price. As a result, film producers have seen their payouts decrease as a result.
In addition to cutting down on costs, the future of entertainment is based on control and access to content. With streaming services gaining popularity, competition for content and talent has increased. Costs for scripted TV shows have doubled since 2010. Currently, streaming services pay up to $20 million for an hour-long episode, which is double the price paid a few years ago. Further, consolidation of networks and studios is inevitable in the future of the entertainment industry.
Even as SVOD services continue to grow in scale, the film industry has struggled with the shift to internet streaming services. Streaming services have been driving blockbusterization, with $100 million tentpoles edging out star vehicles, mid-budget fare, and rom-com’s. Despite the potential for further consolidation, studios may end up owning fewer networks and producing less original content.
As streaming services grow in popularity, competition for content is increasing, forcing large studios to merge. Netflix, for example, is a prime example of this trend. With Netflix now available to consumers in the US, this merger will reduce the number of major studios to five. The combined content libraries of these companies will provide a competitive edge for consumers. So, the future of the entertainment industry will be largely driven by the consolidation of studios and networks.
Impact of OTT platforms
With the rise of OTT platforms, content creation has become democratized, allowing nearly a billion people to create their own content. Amateurs are challenging the traditional industry belief that quality content must be expensive. Even though the average TV series costs $5 million to produce, amateurs are now able to reach tens of millions of viewers for a fraction of the cost. While the future of entertainment content may be uncertain, it is clear that the industry will be impacted by OTT.
Despite the rapid growth of OTT, the traditional broadcast networks are not going away. The sheer demand for content has forced them to explore new ways of delivering their content to audiences. While cable providers are not completely leaving the Reelcraze industry, they are also targeting OTT audiences with digital streaming. The industry needs content creators who are already adapting to this new model. According to Cisco, by 2022, online video will account for 82% of all consumer internet traffic.
OTT also presents an opportunity for live streaming large events, which would otherwise be canceled. Additionally, the COVID pandemic is having an adverse impact on theaters. However, OTT offers content creators the chance to reach more people and monetize their content. In fact, some movie producers have even opted for OTT platforms as an alternative to cinemas and television. There are many reasons for this shift.
OTT platforms have created a more consumer-friendly environment for content creators and viewers. They have also improved data analytics that makes it easier to target audiences. This improved data allows advertisers to increase their Return on Investments (ROI) and produce better results. In addition, the OTT wave has made it possible for advertisers to reach more audiences. This means that they can make better, more targeted advertisements that reach their target audience.
Impact of social media
With the introduction of streaming services, social media has quickly gained momentum and become a recognized part of the entertainment industry. It is also changing how consumers consume entertainment. Until two decades ago, the internet was the only means of direct communication and information. Today, it is one of the largest sources of entertainment, influencing and inspiring nearly every technological innovation. Streaming services have become the norm for watching movies and television shows. Streaming allows consumers to easily find and share their favorite entertainment content.
As the use of social media has become ubiquitous, it is difficult to ignore its effects on entertainment news. From celebrities to audiences, social networks have become critical tools in digital journalism. They are used for celebrity marketing and entertainment reporting. These new tools are gaining a large following in Nigeria, but there are also many challenges and opportunities associated with the use of social media for entertainment. For these reasons, this study will analyze how social media is affecting the entertainment industry.
As the world becomes more connected through social media, fans can interact with their favorite stars. Using Twitter, top celebrities can respond to fans’ reactions and comments. Fans can even DM them to show their affection. This interaction between fans and celebrities is also easier on social media. While it is possible to communicate with celebrities, fans will still rely on personal recommendations or referrals from friends. If you have a fan, it is highly likely that they are on social media.
While the mainstream entertainment industry is not scientific, it often builds on the work of Miguel Sabido and Albert Bandura. They pioneered large-scale television shows with role modeling and entertainment with proven social benefits. As a result, mainstream entertainment generally works with a “Theory of Change” that outlines the potential social effects and a way to measure them. The Theory of Change is typically preceded by a large amount of research.
Impact of digital-native behemoths
The impact of digital-native behemoth content platforms is clear. These companies have reached levels rivaling major Hollywood studios. In fact, content spending by Netflix alone is estimated to reach $18 billion by 2020, more than the combined budget of the big six movie studios. In 2018, Netflix alone produced 80 original feature films. And while they have many competitors, their scale is unrivaled.
As the consumption of entertainment reaches new heights, these digital-native behemoths are disrupting the industry as well. These companies have shifted consumers’ behavior, giving them access to a variety of integrated offerings. These platforms offer shopping, gaming, devices, and digital services in a single platform. Media companies with diversified businesses are aiming to build their own flywheels. In this way, they will be able to attract new subscribers while increasing the stickiness of their D2C revenue model. They will also extend customer relationships.
While digital native media outlets are unconventional and nontraditional, they do have some advantages. They started as online news outlets and mastered the methods of distributing their content. Their audiences are used to the new way of consuming news online. They rely on social media networks to drive traffic to their websites. They are also able to make money without traditional news outlets. And their revenue model is largely dependent on their ability to make a profit in the fast-changing digital world.
A big problem with post-merger integration is culture. When incumbents buy technology companies, they hope to shift the culture but find that the incoming talent is not compatible with the company’s existing cultural practices. When smaller acquisitions get acquired by larger corporations, they can end up dying on the vine. This is a dangerous cycle. Fortunately, Millennials and other digital natives are leading the way.