The Global Media and Entertainment (M&E) Industry is one of the largest in terms of market size and revenue. According to some estimates, the US M&E industry is the largest in the world, and it has revenue in the region of $735 billion annually. This makes up about a third of the global M&E industry in terms of revenue and market share. However, new technology is fueling fundamental shifts in the industry, and this article undertakes to bring some of them to your attention.

Background of the industry

The global M&E industry is fast changing. In the last century, the industry was dominated by the broadcast sector where television programs and commercials were the major sources of revenue. Notably, this segment of the industry falls under the film subsector of the industry. Particularly, the film subsector remains the largest by revenue across the industry.

For starters, the M&E industry has continued to evolve especially since the internet became entrenched as a solid trend. As such, the industry is now made up of five significant subsectors including film, TV, Video games, music, and publishing. The internet changed the way people consume content. Interestingly, it is still the internet which is fueling the fundamental shift in content production and consumption. According to a PwC report, there is a significant shift in how companies in the industry are spending which mirrors the availability of new growth opportunities.

Commercials form the core of the digital wave

Like earlier discussed, the internet has changed the industry in unimaginable ways. In particular, digitization of the industry has opened new growth opportunities which threaten the traditional setup. One area which is experiencing fundamental shifts is the commercials sector. With the growth of the internet, such services as video streaming and video gaming are becoming more popular. As such, advertisers and other publishers are increasingly changing to digital platforms.

To be sure, there is a marked increase in spending on digital video advertising. According to eMarketer, the amount spent on digital video advertising in 2019 will be in the region of $3.08 billion. This is a huge change compared to only $0.31 billion in 2015. Another report by PwC indicates that global spending on new advertising avenues is increasing. In particular, the report noted that between 2011 and 2019, spending on internet ads grew by 7.8% CAGR. Generally, companies spent on advertising and access business models more than any other sectors in that period.

The old and the new co-existing

The growth of the digital sector notwithstanding, the good old broadcast sector is holding strong. For instance, India is home is one of the fastest growing economies in the world. The country is also witnessing an M&E industry which is growing just as fast. According to some estimates, the revenue for India’s M&E industry could clock $35 billion around 2021. What is interesting is that digital services and linear TV are both growing at similar rates.

To be sure, online video platforms are growing in popularity, but traditional broadcast TV is still raking in huge sums in revenue. Notably, the country is vital for TV networks in Asia where it accounts for about 60% of its revenue in the region. This is a curious development considering that Western markets are departing from broadcasters.

Industry outlook

Nonetheless, the reality is that digital media is disrupting the industry and players in the traditional industry are taking note of that. This is evidenced by the growth in internet ads expenditure captured by the PwC report. Also, streaming services are taking center stage as critical platforms for marketing. With the incorporation of AI and Machine Learning, publishers can personalize content and hence maximizing its impact on the consumers. By and large, the shift to digital platforms for media consumption implies that demand for data will continue to grow.

Via News TV