The year ahead promises to be a time of exciting change as new trends and technologies drive innovation, disruption, and opportunities for growth in media and entertainment. Kevin Westcott, vice chairman and US Media Entertainment leader, Deloitte Consulting LLP, shares his insights on what’s ahead in this industry overview.
As devices proliferated, two key, closely related trends continued to grab headlines in the media & entertainment sector over the past year: 1) The skyrocketing growth of streaming and mobile video, and 2) A shift away from traditional pay TV. According to a recent Deloitte study, 55 percent of US households now subscribe to paid streaming video services, and nearly half (48 percent) of all US consumers streamed TV content every day or weekly in 2017.1 Not only are consumers across all age groups streaming more content than ever before—they are doing it on smartphones and tablets. US consumers now pay about $2 billion monthly for subscription-video services.2
Meanwhile, pay-TV subscribers are reexamining the value they receive from their providers. Nearly half of all pay-TV subscribers report dissatisfaction with their service, and 70 percent feel they get too little value for their money.3
As many consumers halt their pay-TV subscriptions in favor of streaming video on demand, they’re realizing that they need several subscriptions to satisfy their content-viewing preferences. As a result, we may be entering a time of “consumer subscription fatigue,” with too many subscriptions and payments to track and justify. To remedy this situation, providers will probably reaggregate some of their offerings in 2019 in an attempt to truly compete with the many options on the market. At the same time, we’re seeing more and more pay-TV offerings that include subscriptions to traditional streaming services, which will also affect the market. For example, Comcast announced in summer 2018 that it would add Amazon Prime Video to the online content available through its service. Comcast subscribers already enjoy streaming services such as Netflix, YouTube, and Pandora.4
Media companies have also been reevaluating their content strategies, increasingly investing in areas such as augmented and virtual reality (AR/VR). The past two years have seen a series of investments as large and small players alike rush into the AR/VR space.5 “Ask the Expert” services and job training represent two big opportunity areas for AR and VR in 2019.
Similarly, many social media companies are entering the video content broadcasting space. Modern consumers are active on social media and watch a good deal of short-form content on their smartphones. Social networks are marrying these two experiences by pushing their members to tune in to their own short-form videos as well as TV-like programming. In addition, social networks are starting to bid for live sports, entertainment, and original series.6
From a technology standpoint, 2019 appears to be the year that “voice” will truly come to the fore. Adoption and usage of voice-enabled digital assistants is growing, indicating that voice could be the next big thing—after touch—in human-computer interaction. Voice-assisted speakers are gaining strength as well, with US penetration reaching 20 percent.7Deloitte’s 2018 Digital Media Trends survey revealed that over half of US consumers use a voice-based assistant, while a third access one on a weekly basis.8 Smartphones are the most favored voice-assistant platform, followed by voice-enabled digital home assistants.9
In the near future, voice-enabled digital assistants and voice-assisted speakers could also provide intriguing platforms for highly targeted advertising and content delivery, with messages informed by a user’s specific actions and interests.
One other burgeoning trend bears watching in 2019—especially for entertainment companies: eSports. This new phenomenon—multiplayer video-game competitions, sometimes involving professional players—is filling arenas and boosting bottom lines for game publishers and marketers. By 2020, the global eSports market is expected to generate $1.5 billion in annual revenues, primarily from sponsorships and advertising to an estimated global audience of 600 million fans. Marketers bestowed more than 600 brand sponsorships on eSport titles and events in 2017 alone.10 Large-scale media companies are beginning to participate. In July, the Overwatch League’s Grand Finals sold out New York’s Barclays Center. The Overwatch games were also televised over ESPN.