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How the media entertainment industry is rebounding strongly

Industry insights: A strong recovery after Covid-19, how interest in watch parties is surging in younger audiences, and what Black Widow means for the future of movies.

pandemic rebound logoMedia entertainment industry rebounding strongly

While streaming has been a noted success story from the pandemic era, other sectors of the media entertainment industry have fared slightly less well. New data from PwC though suggests that there is a hearty rebound under way across the board, with revenues from streaming, gaming, and user-generated content all reshaping the industry.

As Rapid TV News reports, the 22nd PwC Global Entertainment & Media Outlook report (this one covering the years 2021-2025 and analysing spending by consumers and advertisers across 53 territories) reckons that the industry has regained its momentum, with revenues now outpacing the economy as a whole. Growth will be 6.5% in 2021 and 6.7% in 2022, powered in the main by strong demand for digital content and advertising.

The upwards trajectory of the streaming boom is projected to continue with the SVOD sector set to grow at a CAGR of 10.6% to 2025, making it an $81.3 billion industry. And while this is only roughly a third of the traditional TV industry, which generated $219 billion in 2020, linear TV looks to be in long-term slow decline with a projected 1.2% shrinkage over each of the next five years.

Meanwhile, cinema revenues are projected to rebound in 2021 as lockdowns ease but will not recover to pre-pandemic levels until at least 2024. And mobile internet access revenues rose at a 6.1% CAGR from $449bn in 2020 to $605bn in 2025.

“Whether it’s box office revenues shifting to streaming platforms, content moving to mobile devices, or the increasingly complex relationships among content creators, producers and distributors, the dynamics and power within the industry continue to shift,” said Werner Ballhaus, global entertainment and media industry leader partner, PwC Germany commenting on the report. “The hunger for content, continued advances in technology and new business models and ways of creating value will drive the industry’s growth for the next five years and beyond.

Watch parties take hold in younger demographic

One of the trends that has certainly been accelerated by the pandemic has been the watch party, or co-viewing as its also known. A Hub Entertainment Research survey from the US states that 23% of viewers said they have watched via a co-viewing app or service this year, up from 20% in 2020 — which was in turn up on the previous year’s figures.

There is a strong demographic difference in popularity though, which possibly reflects a trend towards a lack of ease of use in the apps in question. Hub says that 41% of viewers age 16-34 said they’ve used a co-viewing app, compared with 23% of those age 35-54 and only 3% of those 55 or older.

Fierce Video reports that Amazon Watch Party is the most commonly used co-viewing app, with 44% of respondents saying they used it, followed by Discord with 28%, and Zoom with 27%.

It’s an increasingly crowded market. Hulu, Sling TV, Comcast, Amazon, Movies Anywhere and Disney+ all debuted different co-viewing experiences during 2020. Of particular interest though is Comcast’s livestreaming app for its X1 and Flex services called Watchwith, which not only lets viewers interact, but includes features like Sneak Peek meter, a polling feature that will enable the audience to collectively unlock video clips.

Such gamification feels like an element to these services that could really take them to the next level.

“Co-viewing apps and services are becoming increasingly important, no doubt driven in part by recent pandemic experiences,” commented David Tice, senior consultant to Hub and co-author of the study, in a statement. “Content distributors and streaming services that help enable this behavior will increase their appeal to young adults overall, and in particular young men. This is an important consideration with the advent of fully or partially ad-supported streaming services and the desirability of these key demos to advertisers.”

How Disney’s ‘Black Widow’ shows changes in Hollywood

On July 9, Disney released the long-delayed latest entry into the Marvel Cinematic Universe, Black Widow. Originally slated for a theatrical release date in May 2020, it got pushed back three times in total, but that didn’t stop it quickly becoming the biggest domestic debut of the pandemic era in the US. 

Helped by at least a partial reopening of US theatres, it took $80m in its opening box office week in the US, and roughly the same in the global market. Perhaps more interestingly, it also took $60m online as part of a simultaneous PVOD release on Disney+. And it is this that has Hollywood concerned.

Its the first time that any of the big studios have talked numbers since the success of Trolls World Tour last year. Black Widow cost $30 a time to watch, which means that 2 million Disney households paid for a movie they will be able to watch as part of their sub come October. And while that is only 2% of its 100 million strong subscriber base, as The Hollywood Reporter points out, Disney keep 100% of that money whereas it has to split its box-office receipts with cinema chains.

There are positives and negatives for Disney here. On the downside it looks like the movie underperformed; it was on target for $90m to $100m at the box-office but audiences fell away steeply, presumably because of the watch at home option. On the upside it gained a significant amount of new sign-ups specifically to watch it, not all of whom are going to churn away straight away. And following the announcement of its figures the company’s stock jumped 4% while theater stocks dipped across the board.

The big question is how will this shake out once the pandemic is over and box office is back to normal. The expectation is that the big studios will reinstate the release window as online releases effectively cannibalise their own audiences and there are legitimate concerns about both content piracy and password sharing. However, the 90-day release window of the past is gone, with 45 days looking like being the new normal, shrinking to 31 days or even 17 for some titles.

Andy Stout

Andy Stout is a broadcast and technology journalist, who, over longer than he cares to think about, has written for most of the major publications in the industry. He is fascinated by technology and its evolving impact on society, and enjoys bringing an eclectic viewpoint to the Viaccess-Orca blog. He was awarded a First Class BSc from the Open University and lives with his family in Northern Ireland.