Gaming, on both mobile and PC, is by far the fastest growing sector in the world in the media and entertainment industry, according to data from PwC. Streaming video is also experiencing explosive growth.
why is it important: While these sectors were always poised to expand with the development of the internet, the pandemic has seriously accelerated their growth, forcing the world’s largest media companies to reorient their businesses faster than many were ready to do it.
Drive the news: A series of new media mergers shows that the entertainment giants are moving quickly to consolidate even more in order to have enough large-scale content to compete in streaming.
- The recently announced Discovery-WarnerMedia deal has sparked a new round of mergers as its peers scramble to reach size.
- Shortly after the deal was announced, Amazon said it would buy MGM Studios, one of the country’s last remaining independent film studios.
- This deal then sparked a new conversation among analysts and media insiders about the next venture.
- AMC Networks and Lionsgate are seen as ripe targets. Rumors of deals with Comcast’s NBCU and ViacomCBS have also drawn attention.
be smart: While traditional media giants focus on growth to compete with tech giants, tech giants are eyeing an even bigger fish: gaming.
The big picture: Gaming is growing so rapidly that it’s on the verge of overtaking pay-TV subscription revenue one day.
- Pay TV is defined as live television content that consumers pay for through subscriptions, such as cable, satellite, or digital over-the-air television packages often referred to as “skinny bundles”.
- Pay TV is in terminal decline in the United States and faces similarly bleak prospects abroad as broadband becomes more accessible globally.
- For a long time, many of the nation’s biggest content companies, such as Disney, ViacomCBS and Comcast/NBCU, made most of their money from pay-TV subscriptions and advertising.
- These companies are the ones that have the hardest time balancing investments in streaming, because for now, pay-TV is still big enough to generate considerable revenues and profits.
What to watch: Other sectors like esports and digital audio are growing, but are still small compared to games or video.
- Esports in particular is growing very fast, but because the industry is still so young, the earning potential is currently relatively very low.
- Print media and movie theaters show few signs of growth as the internet allows more people to consume content on their phones or through streaming TVs at home.
