When I sat down to consider my predictions for the media and entertainment industry in 2021, I struggled to think of a market segment that hasn’t been impacted by COVID-19 in some significant way. The consequences of a global pandemic are ultimately shaping every market – this is the reality we live in now.
Discussions of ongoing vaccination rollouts and building herd immunity are already dominating 2021, but it is not guaranteed to be a quick process. This means a slow return to normality for out-of-home entertainment services such as cinemas and theaters. As a result, technology vendors must start investing in solutions that answer the simple question: “how can we make life indoors more appealing?”
No grand re-openings yet, just a crack in the door
Remote working ‘en-masse’ and a much heavier dependency on streaming are firmly established as part of the ‘new normal.’ It’s hard to believe they were direct reactions to the pandemic, however, and there is certainly no financial incentive for these trends to revert any time soon. The truth is, we are going to be working from home and streaming content until much later in the year, with movie theaters and live sporting events likely remaining closed to spectators in any significant numbers for a long time yet. The question now is how to make being at home like not being at home?
I expect to see heavy investments in Virtual Reality (VR) and Augmented Reality (AR), gaming, and other immersive and interactive technologies that augment the endurability of a more sedentary reality. There will also be a fresh look from the media side on User Generated Content (UGC), and they will look for new ways to enhance it. TikTok is an example of UGC at its finest on a hugely successful platform. From a media perspective, service providers need to find a way to facilitate getting that kind of content onto their platforms from an intuitive content creation standpoint while making it easier to access and more attractive from a home consumer perspective. This will most likely be done by partnering rather than competing with social media giants. Regardless, technology providers would be savvy to target these areas for new initiatives and R&D.
Lots of ‘Out of Business’ signs out the front
In 2021 the M&A activity within media and entertainment will likely be reminiscent of a Pac-Man game of larger players gobbling up smaller ones. Technology vendors, content providers, and content creators who have the wherewithal and a pocket full of contacts will find ways to build a more stable and diversified base of revenue while they still can. This will be the key to surviving the year and planting the seeds for a fruitful 2022.
No one knows what will happen with the vaccine rollouts; achieving herd immunity in 2021 is our big hope for things to start moving again in the long-term. In the meantime, anyone with a healthy wallet will be out to buy to stabilize their 2022 forecast.
As part of that, mobile carriers will be going large on any 5G auctions they can get their hands on. Whether it be C-Band reclamation or otherwise, wherever mobile carriers can invest in becoming more 5G capable, they will. And that also means that some of the larger mobile carriers may be swallowing up the little ones to get better distribution within that 5G aspiration.
Of course, the growth of 5G services will mean a greater ability to carry more media, helping service providers deploy better media services on enhanced infrastructures. This will nurture and incentivize technology providers to target advancements in media (e.g. encoding/transcoding, packaging, advertising, deployment methodologies, content metadata management, alternative content management, etc.) to take advantage of the new larger mobile pipe.
One-time package purchases will become a thing of the past
The bulwark against post-COVID uncertainty will see one-time packages become a thing of the past, with everything pointing towards subscription models as much as possible. Service providers and content providers have the ability to create a more stable and predictable revenue base in the current COVID and post- COVID worlds. Selling individual movies and packages will become very difficult to maintain, as they don’t enable a predictive revenue stream. So, this year, folks will move to primarily subscription services to settle that out.
In turn, this means that service providers and content providers need to offer better value to entice people to make a larger investment into a subscription rather than a one-time purchase. That means better technology, better resolutions, better video quality, lower latency, and everything else that makes for a better viewing experience!