AUTHORED BY
Maureen Kerr,
Christof Bischofberger

DATE

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State of the media market, 2022

Opportunities abound but challenges still lie ahead

Executive Summary

Year of the Triple Threat

It’s a new dawn, it’s a new day: the global media sector is emerging from the pandemic.

The impact of the COVID-19 pandemic on global media has been double-edged and the effects are not receding; they are evolving into a new era of media. In the opportunity column: the accelerated move to online content consumption, the growth of subscription models, and the development of innovative ad tech provide new inroads to deeper consumer engagement and monetization. In the threat column: the slow return to cinema and live events and the practical difficulties facing production have yet to fully reveal their impact. Finally, in the question mark column: NFTs (non-fungible tokens), blockchain, the metaverse, and a drive to noncore consolidation that provides new avenues to growth — or bloated decline.

The question is: how will global media, sports, and entertainment players manage these COVID-induced threats, capitalize on the opportunities, and meaningfully leverage new technologies to transform their businesses and their appeal to consumers? Our research shows multiple paths forward, the only inviable one of which is sticking to the ways of the past. In short, our Report will show: smart and swift launches, investment, and acquisitions will be the difference between prosperity and irrelevance; and those who attempt to open the doors of the future with the keys of the past will be locked out just as the proverbial ghosts of old media close in. Here we offer insights into what those keys are, and where and how to use them.

As of early 2022, the media market shows strong signs of recovery. Traditional media players are further embracing the possibilities of digital, and new entrants continue to invest: M&A activity, already febrile in 2021, shows no signs of abating. Moreover, the advent of Web 3.0 and NFTs have opened new opportunities for content owners, brands, aggregators, and intermediaries, and we’re just starting to see the innovations proliferate — though sometimes to no avail (e.g., the great fails of NFT launches).

If COVID-19 has taught us anything, it’s that we’re more connected than ever, and the media industry is no exception. Media players are more global than ever, having made strong footholds in strange lands, and this drives greater economies of scale. Content creators are the big winners in a world increasingly driven by global hits, whether the content is presented in the English language or not. Conversely, local publishers in all sectors are partnering or consolidating actively to defend their market advantage or adapting to double-down on their local position, offering new formats and methods of engagement.

But is it all rosy? When will consumers draw up their purse strings and rationalize their spending? How many billions can be spent on content for niche audiences that garners awards whose presentations are seen as increasingly passé? When will heightened calls for privacy and/or cultural protectionism cut ambitious international content superhubs off at the knees? As post-Omicron 2022 unfolds, the media market is “feeling good,” but we predict that the drama of the past two years is about to lay out a third act, and each media actor — expanding into new territory (digital, physical, and meta) — has its breathless part to play.

 

AIM OF REPORT & METHODOLOGY

AIM OF REPORT

With this Report, Arthur D. Little provides insight into the state of the media market and its prospects. The aim of this Report is to provide a solid overview of recent and upcoming trends in the media industry for:

  • Media corporations and their executives to identify opportunities for vertical or horizontal integration, as well as to guide portfolio optimization and go-to-market strategies.
  • Telecommunication corporations and their executives to give guidance in the development of their non-core business segments.
  • Financial investors to detect the most attractive market segments and acquisition targets.
  • Academia to build on a comprehensive data set and a framework that can be used to conduct research on the transformation of individual segments of the media industry.

METHODOLOGY

The insights into current market trends were developed through extensive industry expert interviews with senior executives and draw on project experience with various global media players across all segments. The quantitative market sizing and future forecasting of the industry covers 53 countries and a 10-year period from 2015-2024. Apart from segmenting the market by segments, geographies, and expenditure, this Report uniquely analyzes the flow of revenues through the entire value chain.

DEFINITIONS

  • Traditional distributors — defined as all entities holding the direct consumer relationship in a given media segment (e.g., pay TV platform, news stand, physical media retailer).
  • Traditional aggregators — all entities aggregating individual units of content into consumable media (e.g., newspaper/magazine publishers, TV channels, games publishers, music labels, and publishers).
  • Content owners — either individuals (e.g., authors, independent journalists, artists, TV/film producers) or corporations (e.g., Hollywood studios, press and photo agencies).
  • Digital players — include both aggregators and distributors that provide consumers with high degree of digital content (e.g., video/music streaming platforms, cloud gaming providers).

EXECUTIVE SUMMARY (ONLY DOWNLOADABLE)

    Download The Full Report

    State of the media market, 2022

    Opportunities abound but challenges still lie ahead

    AUTHORED BY
    Maureen Kerr,
    Christof Bischofberger

    DATE

    Executive Summary

    Year of the Triple Threat

    It’s a new dawn, it’s a new day: the global media sector is emerging from the pandemic.

    The impact of the COVID-19 pandemic on global media has been double-edged and the effects are not receding; they are evolving into a new era of media. In the opportunity column: the accelerated move to online content consumption, the growth of subscription models, and the development of innovative ad tech provide new inroads to deeper consumer engagement and monetization. In the threat column: the slow return to cinema and live events and the practical difficulties facing production have yet to fully reveal their impact. Finally, in the question mark column: NFTs (non-fungible tokens), blockchain, the metaverse, and a drive to noncore consolidation that provides new avenues to growth — or bloated decline.

    The question is: how will global media, sports, and entertainment players manage these COVID-induced threats, capitalize on the opportunities, and meaningfully leverage new technologies to transform their businesses and their appeal to consumers? Our research shows multiple paths forward, the only inviable one of which is sticking to the ways of the past. In short, our Report will show: smart and swift launches, investment, and acquisitions will be the difference between prosperity and irrelevance; and those who attempt to open the doors of the future with the keys of the past will be locked out just as the proverbial ghosts of old media close in. Here we offer insights into what those keys are, and where and how to use them.

    As of early 2022, the media market shows strong signs of recovery. Traditional media players are further embracing the possibilities of digital, and new entrants continue to invest: M&A activity, already febrile in 2021, shows no signs of abating. Moreover, the advent of Web 3.0 and NFTs have opened new opportunities for content owners, brands, aggregators, and intermediaries, and we’re just starting to see the innovations proliferate — though sometimes to no avail (e.g., the great fails of NFT launches).

    If COVID-19 has taught us anything, it’s that we’re more connected than ever, and the media industry is no exception. Media players are more global than ever, having made strong footholds in strange lands, and this drives greater economies of scale. Content creators are the big winners in a world increasingly driven by global hits, whether the content is presented in the English language or not. Conversely, local publishers in all sectors are partnering or consolidating actively to defend their market advantage or adapting to double-down on their local position, offering new formats and methods of engagement.

    But is it all rosy? When will consumers draw up their purse strings and rationalize their spending? How many billions can be spent on content for niche audiences that garners awards whose presentations are seen as increasingly passé? When will heightened calls for privacy and/or cultural protectionism cut ambitious international content superhubs off at the knees? As post-Omicron 2022 unfolds, the media market is “feeling good,” but we predict that the drama of the past two years is about to lay out a third act, and each media actor — expanding into new territory (digital, physical, and meta) — has its breathless part to play.

     

    AIM OF REPORT & METHODOLOGY

    AIM OF REPORT

    With this Report, Arthur D. Little provides insight into the state of the media market and its prospects. The aim of this Report is to provide a solid overview of recent and upcoming trends in the media industry for:

    • Media corporations and their executives to identify opportunities for vertical or horizontal integration, as well as to guide portfolio optimization and go-to-market strategies.
    • Telecommunication corporations and their executives to give guidance in the development of their non-core business segments.
    • Financial investors to detect the most attractive market segments and acquisition targets.
    • Academia to build on a comprehensive data set and a framework that can be used to conduct research on the transformation of individual segments of the media industry.

    METHODOLOGY

    The insights into current market trends were developed through extensive industry expert interviews with senior executives and draw on project experience with various global media players across all segments. The quantitative market sizing and future forecasting of the industry covers 53 countries and a 10-year period from 2015-2024. Apart from segmenting the market by segments, geographies, and expenditure, this Report uniquely analyzes the flow of revenues through the entire value chain.

    DEFINITIONS

    • Traditional distributors — defined as all entities holding the direct consumer relationship in a given media segment (e.g., pay TV platform, news stand, physical media retailer).
    • Traditional aggregators — all entities aggregating individual units of content into consumable media (e.g., newspaper/magazine publishers, TV channels, games publishers, music labels, and publishers).
    • Content owners — either individuals (e.g., authors, independent journalists, artists, TV/film producers) or corporations (e.g., Hollywood studios, press and photo agencies).
    • Digital players — include both aggregators and distributors that provide consumers with high degree of digital content (e.g., video/music streaming platforms, cloud gaming providers).

    EXECUTIVE SUMMARY (ONLY DOWNLOADABLE)

      Download The Full Report