The 2022 Deloitte digital media trends survey is out, and it reveals that U.S. media companies are feeling more turbulence from the deeper currents shaping consumer behavior.
How so? After 15 years of growth, streaming video on-demand (SVOD) services have successfully unbundled video, lowered costs to consumers, and ignited fierce competition among providers. Top SVOD services are consolidating content and taking the competition for subscribers into global markets. But, Deloitte says, they face greater pressure to attract and retain subscribers who have grown savvier about their subscriptions and more cost-conscious.
In that same 15 years, screen-based entertainment has evolved beyond TV and movies. Streamers and studios are challenged to attract and retain younger generations who have grown up with smartphones, social media, and video games, which deliver finely tuned experiences that are social, interactive, and immersive. So, while SVOD providers may have disrupted TV and movies, the medium—and its business models—still looks much the same as it did when they were created 15 years ago.
Since then, social media has expanded and evolved dramatically. Social media services now deliver finely tuned and personalized feeds of images, video, music, news, gaming, and shoppable media to billions of users, all lit up by social networking and provided for free. Top services are adding new lines of revenue by becoming retail destinations and leveraging influencers and creator economies to reinforce engagement and purchasing.
Meanwhile, thanks to smartphones, competitive esports, and rich, Hollywood-level experiences that cast the player as the star, gaming has gone global and expanded across generations. Gaming may have started as an individual experience, but it is now highly social. And game companies have evolved to monetize many aspects of gaming, from subscriptions, in-game purchasing, and extensible games that operate more like services, to embracing the social experience of gaming with multiplayer, branded content, and virtual goods.
Although SVOD broke apart the cable bundle, since then, streamers and studios have mostly focused their innovation strategies on content delivery and licensing rights. Social media and gaming companies have been quickly evolving their business models and products, leveraging technology, and capitalizing on behaviors. This doesn’t mean all digital media must become social and interactive. But SVOD services should be aware that more audiences are finding entertainment, community, and even meaning, elsewhere.
This year’s study expanded beyond the United States: We also included the United Kingdom, Germany, Brazil, and Japan—areas where media and entertainment companies are competing for digitally mature audiences. Overall, the trends we’re seeing in the United States are echoed in these countries, with the same generational contours. Amidst a global pandemic that has constrained in-person activity, people and companies are being accelerated into digital life, setting the stage for the current excitement about the metaverse—where virtual spaces become common destinations for work and play. But these shifts were already in place before COVID-19. With millions recording themselves doing the latest viral dance moves, influencers driving sudden demand spikes for products, top musicians delivering other-worldly concert experiences to global gaming audiences, and virtual goods becoming valuable and scarce with non-fungible tokens (NFTs) and cryptocurrencies, digital life may be gaining on so-called real life.
Social media broke open the TV screen and made fame much more accessible. Gaming enables us to act in the movie. Media and entertainment executives—and especially those in SVOD—should be thinking hard about how people socialize around entertainment and how entertainment itself is becoming more personalized, interactive, and immersive. The business models that have brought them this far, and even the technologies they have relied on, may not carry them through the next wave of change.
TO VIEW THE ENTIRE REPORT, PLEASE CLICK HERE
