What does the new year hold? Learn more about Ness’ top 3 media and communications industry predictions for 2021.
Each industry has been presented with new challenges as a result of the COVID-19 global pandemic. Some companies have faced unprecedented demand for their products and services, while others have found themselves completely shifting their business models and strategies just to keep their doors open. Even within an industry, such as the media and communications sector, the effects on businesses range based on their specialty. For example, companies that previously thrived on holding live events have experienced a significant negative impact due to restrictions. On the opposite end of the spectrum, there has been a significant surge in video and music streaming and online gaming as people across the globe have relied on these services for in-home entertainment. In fact, many proprietors are calling themselves the ‘providers of healing services’ during these troubled times. Even after the pandemic subsides, it is expected that the time spent by consumers on such services will likely reduce but will remain higher than pre-pandemic times.
As we look ahead to 2021, we predict 3 key trends will dominate in the media and communications industry as they strive to meet the increasing needs of consumers in this new normal.
1. Continued Investments in Scalable Streaming Platforms and Digital Content Protection
Like many households, I had two streaming service subscriptions prior to the pandemic. Months later, I’ve since doubled my streaming services to gain access to more content. This scenario has been common during the pandemic as consumers across the globe have looked for alternative ways to occupy their time and battle loneliness. Consumers have also turned to was online gaming. Gaming app usage increased has increased significantly and soared by 132% during the last week of March 2020 alone. With these unplanned spikes and as more and more content is shifting to an online format, the existing platforms had to and will need to continue to enhance and scale. This is a must for this industry to keep up with demand in 2021.
We will also continue to see a surge in new small, mid, and large-scale platforms mushrooming across the globe to capitalize on this market. NBC Peacock, which launched in October 2020, already has 26 million subscribers and is expected to grow to be the largest US over-the-top (OTT) streaming platform. To keep up with the sheer volume of demand and to remain relevant, companies will need to invest in building the next generation of scalable platforms to provide live and streaming content.
This increased volume also intensifies core issues of digital content piracy – an area that has been largely ignored so far; however, technology companies will need to invest in this area in the near future. Research indicates that more than 80% of piracy is attributable to streaming and estimates that global online piracy costs the U.S. economy at least $29.2 billion in lost revenue each year. This means that not only is it important to produce engaging content but becomes equally important to focus on its rightful distribution and consumption.
2. Increase in Thematic Content Streaming
The second of our media and communications predictions focuses on the concept of thematic content. Even though the OTT streaming services market seems to be saturated, a trend we will continue to see into 2021 is the rising popularity of thematic or niche streaming services. A report from Magine Pro revealed that thematic streaming services will generate over $2.8B in 2020. While Netflix and Amazon Prime remain popular, consumers are also looking to fill their entertainment needs with a complementary alternative to general streaming services that reflect a common interest, such as horror/thriller, anime, or sports.
One of the more promising aspects of thematic content providers is their ability to move with agility to bring new and engaging content to their consumers; however, like other larger streaming services, the ability to keep their library of content up to date will be key to consumer retention. As thematic services continue to proliferate, we anticipate partnerships playing a role in the long-term viability. Partnering with telco’s and other pay-tv providers can help attract subscribers to these niche services. Non-live sports are likely to take center stage amongst others as fan bases expand and consumers look to alternatives to traditional sporting events. Prior to the pandemic, the concept of competitive, organized video gaming had gained significant popularity. eSports is now a billion-dollar industry projected to increase to $1.8B by 2022. User engagement with sites, such as YouTube Gaming, Twitch, and Facebook Gaming has experienced a 20% increase in the number of hours streamed during the pandemic, a trend that we expect to continue in 2021.
3. Focus on Personalized Content
As noted by Netflix, the typical subscriber may lose interest if they don’t find something to watch in the first 60-90 seconds of browsing. As we approach 2021, the idea of personalized content is no longer optional with these limited attention spans. A consumer wants to be recognized as an individual and served content relevant to their interests. Striking the right balance will be key to giving recommendations that are ‘friendly’ versus content that is too personalized which may raise concerns about privacy. Media and communications companies will look to bring their disconnected data together and generate meaning from unstructured content. Leveraging metadata tagging solutions will be key to increasing their content’s value, improve search, and provide a faster, more relevant, and personalized experience for consumers.
Undoubtedly, the media and communications industry is going through a major evolution that will continue into 2021 and years to come. Technology will remain at the heart of this evolution, be it building and supporting scalable platforms, designing solutions to generate intelligence from consumer behavior to control churn, and solutions to control digital content piracy meaningfully and effectively.
For more information on predictions in the media and communications industry and how to leverage the power of digital technology to provide engaging content to your consumers, contact us today.
– Amit Gupta, Associate Vice President