How frequently did you hear the comment "I guess I have seen everything on Netflix" during the harshest COVID-19-induced lockdowns?
One positive development in what was generally a challenging year for the global entertainment and media sector was the rise in popularity of movie and television material streamed over the internet (also known as "over-the-top," or OTT).
According to a recent analysis from the global consulting firm PwC, the sector, which saw a decline in revenue due to the pandemic, is predicted to return quickly and rise by more than a quarter by 2025.
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Impact of Covid-19 on the Media and Entertainment Industry
Since people were primarily confined to their houses and their TV sets (or mobile phone screens) were their only link to the world and the only source of news and entertainment, television channels had to continue operating as a utility service, and their viewership increased.
As a result, content consumption significantly rose. Sadly, this did not lead to a comparable rise in revenue. It is ironic. Consumers' total buying power was decreased due to salary cutbacks and job losses caused by the weakening of the economy.
As a result, their expenditure was limited to the absolute necessities, which meant that marketing efforts, including advertising, were useless—at least during the prolonged lockdown, which lasted from early April until late June. Thus, even if the number of viewers and the amount of information consumed rose, the entertainment and media industry's profits reached an all-time low.
In July, when the lockdown was progressively lifted, limitations were relaxed, and life started to stutter back toward routine, the revenue streams began to pick up once more—albeit very slowly. Additionally, with the start of the holiday season, general entertainment channels' income levels surpassed pre-COVID, although most specialty channels have not yet accomplished the same feat.
The news section, however, has been a notable exception. For obvious reasons, news stations benefited from the shutdown as more and more people flocked to them for information on the coronavirus and lockdown measures.
Media and Entertainment Industry Post-COVID-19
Consumer behavior quickly changes as the globe gets used to a new normal. At-home digital media like OTT platforms, which are now reaching new demographics and places, are in high demand. Following COVID, this will only become worse. Furthermore, even once the crisis passes, it will take some time for consumers to resume using models of external consumption.
Because of this, technological development would be essential in bringing outside entertainment to consumers' homes.
The future is digital. There will be an increase in new users and the retention rate of current digital customers. As technology improves significantly assists them, demand for OTT originals and online games will only rise.
The best thing is that they do not rely on advertisements because their business strategy is subscription-driven. Even if television is undoubtedly here to stay, OTT will see significant growth in the meantime.
Additionally, M&E businesses will probably rely more on technology to maximize cost efficiency and increase revenue growth. Profit protection and cash management will become more strategically crucial for M&E organizations as monetization and revenue in terms of ad-spend continue to struggle.
However, that was not the case for Netflix. Netflix's member base increased to 222 million last year, but the streaming service faces challenges going forward as the pandemic-related demand spike wanes. Investors had hoped for a resumption of such a pace. However, the company's 2022 outlook revealed negative news, which caused shares to drop roughly 20% in after-hours trading. Compared to analysts' expectations, the company only anticipated adding 2.5 million members in the three months leading up to March. According to Netflix, there is still an opportunity for expansion as more and more individuals eschew traditional television.
Let us look at the use cases of data analytics in media and entertainment industry trends that we will see in the upcoming few years-
Use Cases of Data Analytics in the Media and Entertainment Industry
Predicting the Interest of the Audience
Media outlets and entertainment channels can benefit from big data analysis, particularly those that rely on internet streaming. Since pleasing their customers' opinions is their top priority, these channels strive to have the categories and material necessary to accommodate virtually all types of viewers while also focusing on the dominance of content diversity.
Big Data offers these powerhouses in media and entertainment a ton of classified data. The critical elements of this type of data that can assist companies in predicting a specific viewer's interest include search history, ratings for each genre, social media trends followed, age, language, etc. Based on this, they can not only customize the viewer experience but also produce realistic and most-wanted program ideas.
Optimization and Monetization
Companies can decide to include a specific movie, for instance, in their content list just because it is hot and consumers would like to watch it, based on current trends and market releases.
This might bring in more money for the businesses than usual because they usually monetize such unconventional material to keep viewers interested and draw in new users looking for the same stuff. They are more prone to use such message boards for fun.
As a result of how viewers responded to the show's or movie's trailers, there is also material where the firms decide to reserve a certain film or television program for a membership-only audience, which is often a paid subscription—requiring viewers to purchase a subscription to access these.
These businesses further attempt to attract users by making a certain episode or movie available for free before exclusive streaming to subscribers. Many entertainment companies, like Netflix, Hotstar, and Amazon Prime, achieve this by offering different materials to members and non-members.
Recognition of Audience Disengagement
Whatever business continues to find it challenging to deal with a customer's departure in any industry, the same is true of these media and entertainment businesses; they provide membership for access to certain material essential to converting customers.
The price and term of membership are undoubtedly subjective decisions made by each organization, and they are frequently updated and amended. Big data also sheds light on recurring clients and devoted fan communities. In some instances, after receiving several push alerts and requests for action, members decide to opt-out of the membership program rather than renew their subscriptions.
The media and entertainment companies need to pay attention to it to check for mistakes and out-of-date uninteresting information. Big data assists in obtaining the most current understanding of client behavior and enables businesses to change their content in response to platform demand.
Recognizing the Role of Advertising
The primary factor determining a company's market worth and profitability is still advertising. Demands from advertisers for company analyses of their audience behavior are quite important. This can support relevant and individualized advertising at the appropriate time and location. Big data applications also assist in analyzing user behavior and what they are likely to buy through targeted advertisements.
Advertisements are typical and seem to be a natural component of any entertainment industry. This assists the businesses in acting as retargeting agents so that advertising will appear if people are watching a show or a movie with a connection to the items.
The spectator is more inclined to buy 3D glasses if they are marketed in the middle of a science fiction or technological film. The same may be observed in a fashion movie, which will imitate websites and direct viewers into purchasing goods like garments for the latest trends.
Big data not only helps customers and businesses to create content-related advertisements, but it also enables businesses to develop effective advertising strategies based on factors such as weather, timing, second-screen usage, etc. (as the online streaming platforms are multiple devices friendly)
Enhancing Media Stream Scheduling
2.62 billion individuals have social media accounts, according to Statista. The barrier that once stood between distributors and end consumers has been lowered by the exponential rise of digital media distribution platforms. Big data in M&E has made it possible to communicate directly with end consumers without the necessity of a middleman.
Big data analytics has also helped media companies interact directly with their audience through pre-scheduled video streaming and increased revenue. Big data has also assisted the M&E sector in pinpointing the precise content that customers would like to connect with regularly.
Increasingly Niche OTT Options
Through carefully selecting titles that are exclusively relevant to a certain interest or genre, niche OTT services appeal to a specialized clientele. To deliver top-notch, hand-picked content, they rely on a solid grasp of their target consumers and employ expertise rather than algorithms.
One of the most well-known specialized services is Crunchyroll, an East Asian anime provider with more than one million paying users. Another is Passionflix, which offers a variety of classic, romance-themed films and includes a grading system to gauge each movie's "love" quotient.
Specialist services will be more competitive if they have flexible and reasonable pricing structures. One of the most eagerly awaited OTT platforms, DC Universe, also revealed further information before its Autumn debut. An option to pre-order a yearly subscription ($74.99) for an additional three months at no extra cost is shown in the price plans.
The Hindi production business Eros, for example, currently provides over 11,000 film titles and hosts more local material than Netflix and Amazon put together. In some cases, niche players create online communities by personalizing their content to certain groups.
While Netflix and other mass-market OTT services will continue to dominate the industry in subscriber numbers, specialized services will appear to have a place in the market. Mainly if they can "provide everything for someone, rather than something for everyone," as Crunchyroll's CEO phrased it.
