Should tech take over the entertainment industry?
What do movies like James Bond or Star Wars and musicians like Queen or the Beatles have in common? Sure, they are all huge brands that have dominated cinemas and concert halls for decades, but all of them are now under the leadership of large corporations, all of which are directly or indirectly involved in the technology and streaming industry. But should that be the case at all? A comment.
Technology has always changed the entertainment industry massively. From the theater to the film, from the concert to the studio, to a combination of both (live appearance on TV, like the ESC again recently).
But the music labels and film industry had refused to make the leap into the digital world, threatened with huge lawsuits in the case of pirated copies and peer-to-peer networks like Napster were fought with all means. And this is precisely the reason why the technology industry dominates the market.
Because the internet could no longer be stopped. Due to the lack of innovation in the music industry, Spotify was founded and grew rapidly, the same applies to Netflix. Now the new generation of the entertainment industry was born and offered a huge selection of films and music for a monthly price of a DVD or an album. All of this everywhere and made possible by the Internet. Streaming conquered the market.
How big can the streaming market get?
A decade later we are again at a turning point. Not as serious as at the beginning of the 21st century, but it will be decided who will produce films and music for us in the future. Due to the huge increase in streaming users, it has become more and more difficult for many rental companies and distributors to bring their content directly to the customer. So many corporations considered what to do next.
Disney quickly decided to start its own streaming service and to compensate for the lack of physical income with a subscription offer. Disney + started in the USA in 2019 and in Germany in 2020, with great success. What happens if you don’t use this method quickly became clear at MGM. The company had had financial difficulties for a long time, the corona pandemic probably gave it the rest. A big beneficiary of the crisis – Amazon – now saw its chance to expand its own streaming service “Prime Video” with a lot more content and in May revealed its own intention to MGM to buy.
With fewer films from other distributors (Warner has also founded its own streaming service with HBO Max), Netflix and Co. began to produce their own content. Series like “Stranger Things” or “The Man in the High Castle” convinced many critics and Netflix has already won Oscar prizes. So Netflix and Co. are no “niche studios” mehr, but mix with their titles at the top.
Many film studios and music labels slept through digitization and had to watch how Spotify, Netflix, Google and Amazon revolutionized the entertainment market in a legal and innovative way. But should Netflix or Google take over film studios and music labels like Amazon or Disney did? The question is more likely to be: “How big can the streaming market get?“. Because a lack of digitization will mean ruin for many companies in the future.
To deliver Market analysts already an answer. While the Germans bought around 8 million DVDs in 2019, it was only 6.2 million in 2020. The video-on-demand market grew from 13 to 17 million customers, and the trend is growing rapidly. According to the market researcher, global is “Technavio”The streaming market increased by 14% due to Corona.
I know a lot of people who have a maximum of one streaming subscription and would not be willing to take out three to four subscriptions. In addition, many people still enjoy going to the cinema, but how often? Personally, I keep seeing films in advertisements that I like, but go to the expensive cinema instead? Germans are very frugal and if they had the opportunity, many would rather see a film at home for less than go to the cinema. We already have it in the music streaming market. Can you still remember when you bought your last CD? It was very likely an album, nobody buys a single as a CD. This can also be seen in statistics, the physical part decreased by approx. 26% from 2014 to 2020. From 2019 to 2020 it was a full 2.5%.
The corona crisis pushed digitization forward faster, and companies that were already ailing like MGM had to sell. The open fight for the film has now started. Netflix gained many new customers through Corona, Disney and Warner successfully started their streaming services. If the entertainment industry fails to bring its content directly to the customer, then the future will look very bitter. In the future, customers would think twice about going to the cinema or buying a CD instead of streaming content on demand.
