- The worldwide value of new media content each year plausibly runs to hundreds of billions of dollars.
- Growth in this spending has far outpaced growth in companies’ revenues – a seemingly contradictory and unsustainable state of affairs.
- A new report from the World Economic Forum and Accenture presents a framework with which to understand the transformation of this sector.
In 2019, media and entertainment companies spent more than $120 billion on original content. Astonishingly, this amount is not even fully representative of total global expenditure on content. Aside from focusing only on American companies, it also excludes other costs, such as licensing, which for the most popular shows can be worth upwards of $100 million per year, or the price of sports rights. Taking these into account, it’s quite plausible that the worldwide value of content easily stretches into the hundreds of billions of dollars every year.
Indeed, it is by now commonplace to see charts – like the one below – highlighting the seemingly bottomless budgets at the world’s biggest media and technology companies. Such data is presented as evidence of the intensity of competition in the so-called streaming wars, a supposedly winner-takes-all battle between different providers over content and attention.
While investment in content has grown substantially, it has far outpaced growth in revenue from TV advertising, movie ticket sales and over-the-top video subscriptions. If direct monetization is so difficult, why do many media companies keep investing in new content? To understand this seeming contradiction, a new framework for understanding the value of media is needed.
This is because, although the absolute values are relevant, concentrating on them exclusively ends up masking the complete reality of how the industry is changing. If the premise is that investment is the primary driver of success, one could simply argue that spending more is the logical next step for any media company seeking to gain market share.
By this metric, certain companies would have more room to grow than others. At Netflix, for example, which regularly appears on lists of who spends the most on content, almost three quarters (74%) of the company’s revenue is allocated to original content. This is likely pushing close to the limit of what is possible financially. Lionsgate, which invests almost two-thirds of its revenue on content, is in a similar position.
Amazon and Apple, on the other hand, might appear to have smaller content budgets ($6-$7 billion each), even though they still place in the global top-10 buyers of content. And while both are frequently cited as new and aggressive entrants in the entertainment market, these amounts represent only around 2% of revenue at either company.
There is certainly headroom for greater investment; if their objective was to ‘win’ the streaming war, they could comfortably top other providers and still keep spend below 7% of revenue. Doing so would bring them in line with AT&T, which, as owner of WarnerMedia, spends around 8% of its income on original content.
Yet unfortunately, none of this can tell us whether spending more leads to content that is objectively better, nor whether it makes consumers more likely to pay for it. Rather, a more nuanced look is required: one that explains how and why the monetization model for media is changing, and how content is increasingly used as a vehicle for companies to find new and better ways to connect with consumers.
As early as 2015, for example, Amazon highlighted the value of Prime Video to its overall Prime offering. According to Jeff Bezos’ letter to shareholders that year, people who watch Prime Video are more likely to both convert from a free to a paid membership, as well as renew their Prime subscription. A standalone Prime Video subscription costs about 30% more than an annual Prime membership; for this reason, Amazon effectively gives away Prime Video to direct consumers towards Prime instead, which then drives sales to other Amazon properties.
For AT&T, the expected subscription revenue from HBOMax is not likely to add much to its $181 billion annual revenues. But according to one analyst, including the service in its mobile package helps acquire and retain customers, where a decrease of just 0.1% in wireless churn is equivalent to $350m in cash profit.
Ultimately, it’s clear that the value of media to many of the biggest businesses is in its ability to underpin, reinforce and grow other parts of their companies. This is one reason behind the shrinking life span of TV series on streaming services: these providers just need to do enough to attract and retain subscribers; locking them in to their ecosystems is the bigger strategic goal.
With this in mind, there needs to be a more sophisticated way of examining the complex web of relationships in the media industry today, one that goes beyond headline figures on spend or subscriber count. One attempt to do so is demonstrated in this new report from the World Economic Forum and Accenture. Here, we have developed a ‘value map’ that provides an alternative framework for considering how the future of the industry will develop.
In doing so, the report highlights the following six implications for the media and entertainment industry (see below). These include consolidation around direct-to-consumer platforms, the growing tension between profitability and distribution, and the power of first-party data in placing media companies at an advantage.
To create a viable future for media, stakeholders in the industry will need to adjust their strategies in light of these trends and let go of old constructs which no longer serve consumers and society at large.
Nunatsiaq News seeks applicants for journalism, communications, media studies bursaries – Nunatsiaq News
Bursaries worth $5,000 available to Inuit post-secondary students from Nunavut or Nunavik
If you’re interested in a career in journalism, communications or media studies, and you’re an Inuit post-secondary student from Nunavut or Nunavik, Nunatsiaq News would like to help you.
The northern newspaper has established two bursaries to be awarded annually to Inuit post-secondary students from Nunavut and Nunavik whose studies are focused on the following areas: broadcast television and radio, communications, journalism or media studies.
Each bursary is worth $5,000.
“Nunatsiaq News is an important voice in Nunavut and Nunavik, but Inuit are sadly underrepresented in our journalism team,” said the paper’s publisher, Michael Roberts. “It’s a rigorous profession, and reporters need the proper tools to do the work. That’s why we are launching these bursaries in the hope that it will encourage more Inuit to join our industry in the future.”
As well as providing bursaries, Nunatsiaq News will offer internships, freelance work or summer employment to students.
“While we have worked with Nunavut Sivuniksavut and Nunavik Sivunitsavut on short-term journalism training,” said Roberts, “post-secondary studies are key to increasing Inuit representation in newspaper publishing.”
The bursaries are delivered through Indspire’s Building Brighter Futures: Bursaries, Scholarships, and Awards program, to which the Nunatsiaq News has donated funding.
The deadline for applications is Sunday, Nov. 1.
You can apply online on the Indspire website.
Bright Mountain Media Inc: Meet the team behind a digital media phenom that has tripled in value in the past six months – Proactive Investors USA & Canada
It appears to be well and truly delivering on its potential with the digital content and advertising specialist already predicting revenue growth in excess of 200%.
But what do 2021 and 2022 look like? Acquisitions may be on the cards with chief executive Kip Speyer calling it a buyer’s market.
Investors are only just starting to understand the story.
The shares have motored from just over US$1 in March to over US$3 today. Is there more to come?
Make up your mind after meeting the team behind Bright Mountain Media at Proactive’s Disruptive Growth Virtual Forum on September 23 at 1pm EST.
About the event:
- Ours is an audience of astute high net worth investors, fund managers, private client brokers and analysts
- We look beyond the numbers and meet the people creating the value for shareholders
- Each company has a presentation slot followed by Q & A, giving you the chance to discover the real story
- You can watch the event afterwards on our YouTube channel
ARHT Media Enters into Strategic Partnership with Digital Nation Entertainment LLC – GlobeNewswire
TORONTO, Sept. 18, 2020 (GLOBE NEWSWIRE) — ARHT Media Inc. (“ARHT” or “the Company”) (TSXV:ART), the global leader in the development, production and distribution of high-quality, low latency hologram and digital content, is pleased announce that it has formed a Strategic Partnership with Los Angeles based Digital Nation Entertainment (DNE). As part of this agreement, Digital Nation Entertainment has selected ARHT Media’s HoloPresence Display system as well as a complete Capture Studio system, to provide their cutting-edge hologram technology solution for each of their currently deployed activations.
Digital Nation Entertainment is a mixed reality production and entertainment network inspired by the limitless potential of gaming, storytelling and technology. DNE is building the framework for the immersive entertainment of the future, including volumetric video, mixed reality and digital entertainment.
“Following a very successful activation with ARHT Media in Q1 2020, they became the logical strategic partner to deliver life sized and life like interactive holograms for our growing list of international clients, “commented DNE CEO Craig Evans, “Our latest collaboration is already generating significant buzz.”
“DNE are masters of marrying great storytelling with technology that delivers a unique experience like no other, “said ARHT CEO Larry O’Reilly, “And we have the bonus of having trained their techs on how to deliver our technology, which increases our pool of talent to delight our clients and theirs.”
About ARHT Media
ARHT Media’s patented HoloPresence technology is a complete end-to-end solution that creates a sense of presence for audiences – as though the holographic presenter was actually live in the room. With no noticeable latency, ARHT Media makes two-way live communication with a 3D holographic presenter anywhere in the world possible. We can also playback pre-recorded content and 3D animations on our HoloPresence displays to deliver rich holographic experiences. Add to this our capability to stream the same content online on our premium Virtual Global StageTM.
ARHT Media trades under the symbol “ART” on the Toronto Venture Stock Exchange.
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, disclosure related to the Company’s sales funnel; the Company’s technology; the potential uses for the Company’s technology; the future planned events using the Company’s technology; the future success of the Company; the ability of the Company to monetize the ARHT Media technology; the development of the Company’s technology; and interest from parties in ARHT’s products. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic and competitive uncertainties; regulatory risks; risks inherent in technology operations; and other risks of the technology industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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