At the beginning of 2021, I examined the media landscape and made predictions on trends for the year. Digital disruption continued its momentum throughout the year in an environment shaped by pent up consumer demand. Streaming services that experienced spikes during 2020 began to normalize as consumers started venturing to live events and experiences.
As we look at the year in review, we begin to uncover signs of trends to come in 2022 and beyond.
1. Shift in how consumers stream
- “Super bundles” will emerge, aimed at consumer stickiness– 2021 was the year more significant bundles started to take form. The streaming universe is still in a race to gain subscribers, but new models and partnerships to increase average revenue per user are starting to develop across the media landscape – more to come in 2022.
- Studios will continue to postpone box office feature film release dates – Multiple studios continued to push the box-office release dates of much-anticipated debuts and blockbuster sequels. While some studios have found varying degrees of success in a dual release model, the lucrative profits of a traditional release may be just over the horizon in 2022.
- Cord cutting will accelerate through 2021 but consumers may abandon some streaming services – Per eMarketer1, continued cord cutting in the US could lead to an annual Pay TV subscriber decline of ~5% from 2021 – 2024. And while an environment of rising internet penetration and 5G bode well for streaming services, the sheer volume of choices for consumers may become too much to choose from or pay for.
2. Plan for recovery
- Market-wide ad spend will recover in 2021– Ad spend recovered in 2021 with the lion’s share going towards digital advertising. According to GroupM2, there was an acceleration in digital by 26% compared to an estimated 15% for 2021. The heavyweights in this space continue to drive sentiment across industries.
- Sports, music concerts, and other live events will come back with force– Live events (in the second half of the year) came back with force, buoyed by outdoor venues and consumer shifts towards experiences. Lollapalooza and college football have been emblematic of this return and provide models for integrating best practices for future events.
3. Emergence of new business models
- Convergence between gambling, sports and media sectors will accelerate– In the first half of 2021, 18 landmark transactions in this space took place, putting 2021 on pace to double the number of transactions in all of 2020. Elevated multiples and increasing regulatory scrutiny may keep some companies on the sidelines, but investment in this $135B ecosystem is sure to continue into 20223.
- Artists and celebrities will increasingly offer paid subscriptions– Many companies have capitalized on the intimate relationship between creator and fan in 2021. Super followers, NFTs, and digital fan experiences are becoming the norm. Consumer willingness to pay may have hit its peak with middle of the pack creators, but premium celebrities will continue to garner top dollar behind subscription walls.
While some of these predictions came to fruition in more force than others, there are some trends from 2021 that will continue into the next year – content creation, strategic alliances, and moving with certainty into gray space will drive the media landscape moving forward. In addition, we will continue to see the emergence of new business models and revenue streams from media companies in 2022. Stay tuned for the next blog where we’ll explore the potential areas of expansion.
- eMarketer, Most US Households Won’t Have a Pay TV Subscription by 2024, Alicia Phaneuf, October 8, 2020
- Group M, Global Advertising to Grow by 19%, Brian Wieser, June 14, 2021
- Betting on Convergence: Opportunities Emerging for Media, Gaming, and Sports (kpmg.us)