Top 10 predictions for media and entertainment in 2020

SAN DIEGO (KUSI) – Founder and Chairman of CREATV Media shared his annual “Top 10 Predictions” for the tech-driven world of media and entertainment for the New Year.

“2020 begins a new decade that pushes media and entertainment boundaries and possibilities significantly further. And, looking back at it all, much of it will seem so very obvious – like it does now as we look back at the long and winding road that led us to where we are today.” said Peter Csathy.

Prediction #1 – “The Great Streaming Wars” and global subscription video on demand (SVOD) land grab are finally fully “on” after years of anticipation. Disney+ exceeds expectations, Apple TV+ underperforms, and Netflix faces new headwinds as it plows forward with its Herculean content budget that ballooned to $15+ Billion in 2019 (and its rising debt load to support it).

Meanwhile, AT&T’s “all in” HBO Max bet, NBCUniversal’s Peacock and Jeffrey Katzenberg’s mobile-first Quibi find it hard to take off in those same headwinds due to consumer confusion and “subscription fatigue.” Advertising video on demand services (AVODs) like Viacom’s PlutoTV – an anticipated antidote to that SVOD fatigue – are also lost amidst the noise. Relentless SVOD pricing and exclusive content battles continue unabated in this new “golden age” of movies and television in which the line between the two increasingly blurs (and where the phenomenon of “Peak TV” is nowhere yet to be found). Apart from consumers, Hollywood creative talent is the great beneficiary of the sheer volume of big budgeted stories being told.

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Prediction #2 – As cords continue to cut amidst these SVOD wars (or never connect in the first place), advertisers scramble for new ways to reach and effectively engage with audiences on and off TV screens. They act with new urgency to create impactful content and optimize targeting and personalization. Out of necessity (but also real opportunity), marketers increasingly experiment and turn to eSports, immersive and live experiential advertising.

Lost amidst all the “streaming wars” hoopla is the basic fact that subscription services, for the most part, jettison advertising as a key part of their overall value proposition. That’s the challenge. But the opportunity for brands is to engage more deeply and impactfully with specific coveted audiences. Through it all, traditional ad-supported television broadcasters’ long-term prospects continue to dim, but their short-term bottom lines are buoyed by SVOD giants that spend billions of dollars to break out (not to mention political candidates who bet it all during this upcoming pivotal election year). Marketing expenditures skyrocket as a result in 2020.

Prediction#3 – Mega media-tech M&A comes to a crawl (for now) in the wake of Viacom’s acquisition of CBS. 2020 marks the first year of rest after the past several years of frenetic dealmaking. Now, virtually all major “traditional” media companies have found their dance partners.

That doesn’t mean that media and entertainment M&A is gone forever. Behemoth tech born media companies will ultimately target Netflix, Spotify and others to serve as strategically critical pieces in their much larger machines. Amazon, Apple, Google, Facebook, and Verizon are prime suspects here. And, don’t forget massive international media-tech players like Alibaba and TenCent. We live in a borderless media and entertainment world now.

Prediction #4 – Once maligned streaming again drives double-digit growth for the music industry. Spotify continues its leadership dominance and drives much of that growth, but adds greater losses that ultimately become unsustainable and make it ripe for acquisition.

Meanwhile, China-born social video music giant TikTok, which became a U.S. teen darling in 2019, deepens its fan engagement and monetization model and targets Spotify with its own subscription streaming service that launches in 2020. China’s Tencent Music, which also successfully drives and monetizes direct artist-fan engagement, points the way to others and underscores the global nature of media and entertainment (and players in it).

Podcasting’s consumer appeal and strategic importance to Spotify, Apple and others grow, but monetization at mass scale remains elusive.

Prediction #5 – 2020 finally gives vision to augmented reality (AR) and its ultimate mass commercial appeal. Just like the iPhone ushered in the age of smart phones at mass scale, Apple’s long-anticipated AR glasses usher in a brave new world of visual computing (and ultimately become Apple’s elusive “next big thing”).

Think the film Minority Report and this gives you an idea of this game-changing paradigm shift and evolution of the screen to wearables. Semi-immersed industry eyes also closely follow AR’s original poster child Magic Leap as it struggles to live up to its hype and closes another massive round of financing, which takes its total haul to over $3 billion. Meanwhile, fully-immersive virtual reality (VR) continues to underperform commercially. But that doesn’t mean that VR’s long-term promise won’t ultimately be realized. The coming onslaught of 5G wireless networks hastens the growth of extended reality (XR) in all its forms. Speaking of 5G …

Prediction #6 – 5G networks launch in earnest and 5G compatible smart phones (including Apple’s next iPhone) enter the market. 5G drives high quality video consumption on those phones (a boon for Quibi), begins to transform our media and entertainment experiences (including cloud-based games and eSports), and accelerates the push toward visual computing.

5G networks are critical for data intensive entertainment experiences that demand low latency. 5G also reduces the size of consumer AR and VR “glasses,” since computation and data flow now occur in the cloud and on edge networks rather than in the hardware itself.

Prediction #7 – Warnings grow about an eSports bubble, but smart money plays the long e-game as 5G fueled cross-platform and cloud-based mobile gaming accelerate. Early innovators like Google Stadia and Apple Arcade subscription gaming platforms lead the way.

Given the passionate coveted young demographic at play, brands increasingly embrace games and eSports, which together dwarf the global motion picture industry. Scopely, now valued at $1.7 billion, is one to watch. Look out for the YouTube-ization of games as well, as companies like Koji give everyone (including brands) a platform to easily create, share and monetize games (not to mention use games to deepen consumer engagement). No engineering required.

Prediction #8 – Artificial Intelligence (AI) accelerates its game-changing ways in the world of media and entertainment. Look beyond home assistants like Alexa and Siri that have already transformed our lives, and say “hello” to virtual humans and virtual beings.

Real emotional connections with non-human AI-driven characters become a paradigm shift that is closer than we think and increasingly draws venture capital. Look at virtual influencer Miquela with “her” very real 1.8 million social followers as a model here, as well as Fable’s Lucy Project. AI also increasingly drives cost-effective and efficient content development and production. Synthesia is one startup worth watching. Virtual live events also proliferate, inspired by the success of DJ Marshmello’s Fortnite experiment and musician Lindsey Stirling’s Wave XR virtual concert.

Prediction #9 – Real, not virtual, live “experiences” also increasingly find their way into multi-platform media strategies, driven by a growing counter-movement to digital’s frequently heads down isolation. Live experiences, and their more lasting “soul” (not to mention selfie-worthy moments) deepen brand engagement and monetization. They also drive ever grander “offline” experiments and M&A.

Think of Madison Square Garden’s audacious Sphere project here, a $1.2 billion project that aims to reinvent the venue experience. The first MSG Sphere is rising up from the desert floor in Las Vegas right now to blow minds. At smaller scale, but equal mind-blowing impact, Woolf & The Wondershow’s Cages music experience in downtown Los Angeles’s Arts District demonstrates how technology can expand and enhance the possibilities without overpowering the underlying story. It is a “must.”

Prediction #10 – “Fake news” (including AI-driven “deepfakes”) overrun 2020’s U.S. elections and cause unprecedented societal disruption. The White House hangs its hat on disinformation campaigns actively promoted by major media and social media players, and claims victory no matter what the actual outcome.

The country is divided and threatened like never before in generations. Hacking headlines add to an increasing sense of mass insecurity. But in the face of daunting forces, optimism survives and social activism rises up. 2020’s fear transitions to 2021’s brave new redemptive possibilities.

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